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Volume 23, Issue 98, Jim Carnegie, Editor & Publisher

Thursday Morning May 18th, 2006

Radio News ®

Cumulus begins stock tender
Cumulus Media has launched the Dutch auction tender offer it announced last week (5/11/06 RBR #93), seeking to buy back up to 200 million bucks of its own stock. If enough shares are tendered within the range of 11.00-12.50, Cumulus will buy back 11.5 million shares at the lowest price offered that would allow it to acquire the entire 11.5 million - paying the same amount to all selling shareholders. If fewer than 11.5 million shares are tendered, Cumulus will buy them all, presumably at the maximum price of 12.50 (assuming that at least one shareholder tenders at that price). However, if fewer than 2,875,000 shares are tendered, Cumulus may elect not to buy back any. Along with the public tender, Cumulus has agreed to buy back five million shares from two investment funds of Bank of America Capital, which were original investors in the radio company, at the same price it ends up paying in the public Dutch auction. If the tender is fully subscribed, Cumulus will be retiring 24.1% of its outstanding shares.

RBR observation: We noted one little tidbit in the latest release that was, indeed, mentioned in the original Dutch auction announcement, but didn't get much attention. The top management and directors of Cumulus say they won't be tendering any shares for the buyback. They've all elected to retain all of the Cumulus shares they own, presumably in anticipation of future growth.

FTC NAAG'd about alcohol ads
The FTC is being urged by 20 attorneys general to set stricter limits on alcohol advertising. At issue is audience composition. How many viewers, listeners or readers are age 21 or older? The AGs would like to take the alcohol industry's self-imposed 30% standard and halve it. According to Advertising Age, one of the AGs leading the charge is Maine's G. Steven Rowe, who is co-chair of the National Association of Attorneys General youth and alcohol committee. The Association of National Advertisers recently testified before the California state legislature concerning a bill proposing similar measures, arguing that such legislation (and by extension, regulation) violated First Amendment protections. More to the point, there is no proven causal relationship between advertising and underage drinking, and ANA pointed out that this misplaced focus would detract from more effective measures to curb the problem.

RBR observation: This is to say nothing of fact that there is no universal measurement system which applies to all media everywhere to determine audience composition. Without effective and accurate measurement, no such rule is even possible. The fact that only 20 AGs signed on to this one (and last we checked, there were 56 AGs, thanks to the 50 states plus the District of Columbia, American Samoa, Guam, the Northern Marianas, Puerto Rico and the Virgin Islands) would tend to support the notion that this group of legal beagles is aware that the measure is without legal legs.

Issue ad watch
Candidates are raising cash and getting ready to spend it, but they're not the only ones with a bone to pick as the mid-term elections ease into high gear. We've caught wind of at least three more campaigns out there, and the wind may be heading to some airspace near you. * A union, the American Federatino of Government Employees, is one of them. It's got 100K to spend on radio and print decrying budget cuts at the Equal Employment Opportunity Commission. It says staff cuts threaten a case backlog which may reach 50K by 2007. It's taking its message to radio stations in Birmingham and Montgomery AL, San Francisco CA, Miami FL, Atlanta GA, Chicago IL, Baltimore MD, Austin, Dallas and El Paso TX, and Cheyenne WY. And it wouldn't be an issue ad if Washington DC wasn't included in the mix. Newspaper will be used to augment the campaign in some of those locations. * We mentioned a TV flight coming from the Competitive Enterprise Institute to "counter global warming alarmism," noting that over a dozen cities would be included in the buy. We now know where the two-spot flight is headed: Anchorage AK, Phoenix AZ, Sacramento and Santa Barbara CA, Denver CO, Springfield IL, Albuquerque NM, Albany NY, Dayton OH, Harrisburg PA, Austin and Dallas TX, Charleston WV, and of course, Washington DC. * Finally, there is one with horse race overtones as watchdog Campaign Money Watch is going after Georgia Lieutenant Governor candidate Ralph Reed with a radio campaign highlighting Reed's involvement with the Native American casino dealings of Jack Abramoff, running "...a 60-second advertisement on several stations in Georgia."

April reports go both ways
Two media companies with very small radio holdings reported yesterday on their April revenues, although neither broke out radio separately. TV revenues were up 2.5% in April to 14.2 million at the New York Times Company, but only due to a recent station acquisition. News media (newspaper/Internet/radio) ad revenues were down 3.4% to 196.4 million. Newspaper is obviously the biggest part of that and declines for print overwhelmed a 25% increase in online ad revenues. At Tribune Company, broadcasting and entertainment group revenues declined 3.9% to 116 million. TV revenues were down 2%, while radio/entertainment revenues declined 13.3%, due to fewer Chicago Cubs home games and lower TV syndication revenues. Newspaper revenues were also lower.

Who texts, and what they
want from radio
Cell phone text messaging is becoming a rapidly growing activity, according to more than 26,000 fans of Rock, Alternative, and Classic Rock stations. As Jacobs Media President Fred Jacobs points out, "It is the most frequent cell phone utility - aside from talking - and there are strong signs that radio stations can benefit from being in 'texting touch' with many key listeners." Of the nine in ten who own a cell phone, three-fourths (74%) say they text, especially Alternative fans. Other frequent cell phone functions include use of the calculator, downloading ringtones, and taking/sharing pictures. Many cell phone owners report that text messaging is becoming a very frequent activity. More than one-third (35%) now text at least weekly, while nearly one-fourth (22%) do so on a daily basis. Alternative fans and 18-29 year-olds are especially likely to use cell phone text messaging every day. Women are also more likely to text often. What types of radio station messages are of most interest to texters? Contests and concert information are of the highest value, followed by traffic information. There is less interest in receiving text messages about artist/title information, station appearances, or advertiser information. The preferred source of text messages - the listener or the station - is a toss-up. While 15% of those who text say they'd like to receive text messages from a favorite station, 16% would rather initiate the text message in order to vote for a song or win a prize. But the great news is that an additional four in ten (40%) don't have a preference - they feel that either originating text messages themselves or receiving them from the station sounds like a good idea. Only one-fourth (26%) of those who text at least monthly prefer not to communicate with a station via texting. This is a strong indicator that there are ample opportunities for radio to take advantage of communicating with their audience via text messaging.

Ad Business Report TM

Univision Radio unveils
new programming at upfront
As the Hispanic Radio Upfront mirrors the timing of the annual television upfront, Univision Radio unveiled its plans to add three new shows to the AM programming slate on the Univision Radio Network, RadioCadena Univision. Plans for the three shows were introduced at the Univision Radio Upfront event this week at Gotham Hall in New York, where about 2,000 of the general market and Hispanic buyers and clients that are in town show up. That's up from 500 when it was first organized. Yes, September and October is when the actual renewals are done, but the main upfront presentation takes place in May. This year, the audience was treated to performances by Kumbia Kings, Noelia and Tito El Bambino. Also on-hand for the celebration were Univision Radio's all-star lineup of Doctora Isabel, El Pistolero, Dr. Aliza Lifshitz, Rafael Hernandez-Brito, Carlos Alvarez, Fernando Schwartz, DJ Kazzanova, Fernando Almanzar, Papo Chinea, Gina Pacheco and Lancelot Morciglio. "Univision Radio has a good hook," comments one of last year's attendees, "great talent, and great on-air personalities. In reality for the Hispanic upfront this is television time. What Univision Radio is trying to do is take advantage of the accessibility of talent, the availability of agencies and clients and then puts together a great showcase. The buying public can see what kind of events their vendor puts on."

Coming soon to RadioCadena Univision are the following:
-- "Cuentamelo!" a hot source for news on celebrities and entertainment, featuring inside access to exclusive scoops, the latest gossip and breaking news from the entertainment industry.
-- "Al Dia" is a news and information show that takes listeners to the stories they want to hear, giving audiences the opportunity to voice their opinion in a live, on-air format.
-- "Hollywood Al Aire" will bring the fun, adventure and drama of the movies to the airwaves by taking behind-the-scene looks at the movies and the television programs that shape the Hispanic media landscape each day.

Be sure to catch our feature on the Hispanic Radio Upfront in May's RBR/TVBR Solutions Magazine.

Circle Group names Adamson AOR
Circle Group Holdings and its subsidiary, FiberGel Technologies, a food technology specialty ingredient manufacturer and maker of Z-Trim all-natural fat replacement products, has appointed Adamson Advertising as agency of record. Adamson will develop and implement strategic branding, broadcast, Internet and print, public relations and interactive initiatives designed to promote the Z-Trim brand of all-natural fat replacement powders and gels to the food industry and both the trade and public media. Z-Trim can be used to replace up to 50% of fats and oils in foods, thereby decreasing calories and adding dietary fiber. Z-Trim does not change the taste or texture of foods and it helps people lose weight without dieting.

Media Business Report TM

Salem goes for print-on-demand
Salem Publishing, a division of Religious radio group owner Salem Communications, announced a deal to acquire Xulon Press, a print-on-demand (POD) digital publisher of Christian books. Xulon President and CEO Tom Freiling will stay on to run the operation. Print-on-demand employs digital technology whereby books are stored electronically and printed only as they are ordered. POD reduces the need for large inventory and warehousing and allows authors the opportunity to publish a work in minutes. "This acquisition is an opportunity for Salem to diversify our core radio, Internet and magazine platform, yet continue to serve our niche - the audience interested in Christian, family and values content. Xulon has built a successful print-on-demand, digital-based business that targets Christian writers who want to be published. Since its inception in 1999, Xulon's management team has demonstrated a track record of profitable growth. By providing Xulon the ability to promote its product through our radio, Internet and print platforms, we expect to achieve new levels of success," said Jim Cumbee, President of Non-Broadcast Media for Salem.

Media Markets & Money TM

EMF finds a Junior trading partner
Ever-expanding noncom Educational Media Foundation, operator of Contemporary Christian K-LOVE Network, has found a home in the Tyler-Longview TX market. It has a deal to acquire KTPB-FM from Kilgore Junior College. As nomcoms go, EMF is omnivourous in that it will buy on either side of the 92 mHz noncommercial/commercial divide. In this case, since KJC is also noncommercial, EMF will be way over on the left side of the dial at 88.7 mHz. According to brokers Greg Guy and Summer Foust of Patrick Communications, the price tag is 2M.

RBR observation: The station is licensed to Kilgore TX, which is between the two municipal anchors of this far-flung market, favoring the eastern Longview side. With 79,000 watts to beam off of a 551' tower, this station gets about everywhere it needs to in Tyler-Longview, and then some.

Washington Media Business Report TM

Administration looking
at traffic congestion
Transportation Secretary Norm Mineta has noticed that traffic jams are getting worse. Actually, according to the Associated Press, he noticed five years ago, but he's commenting about it now and suggesting remedies like adding toll booths to certain heavily-traveled thoroughfares, privatizing roads, and looking for ways to speed truck and rail freight traffic. Democrats are criticizing the plan as all talk, no funding.

RBR observation: We do not know about you, but in addition to being a pain in the (insert body part of your choice here), toll booths almost always cause a traffic backup. And that is good for radio. Every extra minute spent in a car often translates into an extra minute listening to the radio. In our market, Washington DC, traffic is such an integral part of radio that we remember 25 years ago when WMAL's Trumbull & Core would give out photographs of our beloved major bottleneck, the Beltway's Woodrow Wilson bridge, suitable for throwing darts at. The last thing we need is for some politician to get in there and mess things up by getting traffic moving at a reasonable pace...

KTVO-TV back on the Radar screen
That's as in Radar O'Reilly, because KTVO is the ABC affiliate from the Kirksville MO side of the Ottumwa IA-Kirksville MO DMA, the former city being the fictional home of M*A*S*H icon Radar. Anyway, it seems that KTVO ran afoul of the FCC's regulations on children's advertising during the last license cycle. Three times. You will no doubt be shocked to learn that, going back to 1998, the station went over the per-program ad limit on those three occasions for a combined total of one minute and 25 seconds. The FCC declared this a de minimis violation and granted the station a license renewal with no further comment and no admonishment. The station is part of the 262M television group housecleaning spin-off from Raycom to Barrington.

Internet Media Business Report TM

A look at the rapid growth of Internet VOD
Mediathink has released a white paper on Internet video on demand (IPTV) and its impact on marketers and advertising-with a special focus on consumer generated content. "The Mediathink team interviewed and researched over 56 providers of Internet video, Internet video ad services and Internet video content aggregators," said Tom Barnes, Founder of Mediathink. "The Internet video space is growing even faster than RSS. We're continually encouraged and fascinated by the rate of adoption of new technology. The 18-24 demographic is particularly adept at using new tools and finding ways to consume and create new media. Marketers must stay on top of these trends or risk loosing brand relevancy." Large video portals such as Google video, YouTube, and iFilm as well as smaller players like Vimeo, Freevideoblog.com and Sharkle are all covered in the paper. Clarity and distinction between business models and approaches are examined and handicapped.
| See the white paper here |

Ratings & Research

Bye, bye ratings books
If your idea of a good time is curling up in the evening with an Arbitron Radio Market Report, you're going to have to find something else to fill your leisure time. The printed books are no more. The upcoming Spring 2006 survey will mark the debut of the Arbitron eBook. You'll need to sit in front of a computer to read it and you won't be able to dog-ear the pages. One bit of good news is that you will get the info faster. In fact, if your station has been paying for Advances, you will save that expense.

RBR Stats

Heavy on-demand media consumers doubled in past year
The percentage of Americans who are heavy On-Demand media users has increased from 11% in January 2005 to 21% in January 2006 according to a new study by Arbitron and Edison Media Research. Internet and Multimedia 2006: On-Demand Media Explodes examines this dramatic increase in On-Demand media usage. In 2005, Arbitron and Edison explored a variety of behaviors, combined with digital device ownership, that define a heavy preference for consuming media On-Demand. This year's study reveals a dramatic increase in the number of Americans age 12+ who engage in multiple On-Demand behaviors such as watching VOD or listening to online radio, and/or own one or more On-Demand media devices such as a portable digital audio and video player (e.g. iPod) or a digital video recorder (e.g. TiVo).
| Key findings from the survey include |

Transactions

650K WCTU-FM Asheville NC (Tazewell TN, moving to Weaverville NC) from Stair Company Inc. (James Stair) to Saga Communications of North Carolina LLC, a subsidiary of Saga Communications Corp. (Edward K. Christian). Cash less option payments (option signed 5/21/02). Duopoly with WISE-AM, WLZR-AM and LMA of WOXL-FM. 105.9 mHz station approved to change city of license from Tazewell TN, Class A with 2.75 kw @ 492' to Weaverville NC, Class C2 with 9.6 kw @ 1,106', at which point it will become part of Asheville NC market. [File date 4/24/06.]

57.5K WXAM-AM Buffalo KY from Mark Goodman Productions Inc. (Mark A. Goodman) to Elizabethtown CBC Inc., a subsidiary of Commonwealth Broadcasting Corp. (Steven A. Newberry et al). 1K escrow, balance in cash at closing. Duopoly with WIEL-AM Elizabethtown KY, WKMO-FM Hodgenville KY. LMA until closing. [File date 4/24/06.]

Stock Talk

CPI report sinks stocks
An unexpected jump in the government's Consumer Price Index sent stock prices plunging on Wednesday, renewing fears of more Fed rate hikes. The Dow Industrials dropped 214 points, or 1.9%, to 11,206.

Radio stocks were no exception. The Radio Index dropped 1.966, or 1.2%, to 158.424. Entravision fell the hardest, dropping 5.8%. Radio One saw its Class D fall 2.4% and Class A 2%. CBS dropped 2% for its widely held Class B stock as it unveiled its fall TV schedule. Both satellite radio companies took hits after XM was sued by record labels. XM fell 5.7% and Sirius 4.7%.

Radio Stocks

**Here's how stocks fared on Wednesday**
Company	Symbol	Close		Change	Company	Symbol	Close		Change
Arbitron	ARB		37.82	-0.22	Hearst-Argyle	HTV		22.57	-0.53
Beasley	BBGI		7.26	-0.02	Journal Comm.	JRN		11.82	-0.04
CBS CI. B	CBS		25.80	-0.53	Lincoln Natl.	LNC		56.35	-1.22
CBS CI. A	CBSa		25.83	-0.43	Radio One, Cl. A	ROIA		8.10	-0.17
Citadel	CDL		10.55	-0.09	Radio One, Cl. D	ROIAK		8.09	-0.20
Clear Channel	CCU		30.51	-0.22	Regent	RGCI		4.25	+0.01
Cox Radio	CXR		14.89	-0.08	Saga Commun.	SGA		9.30	-0.15
Cumulus	CMLS		11.09	+0.01	Salem Comm.	SALM		14.98	unch
Disney	DIS		29.76	-0.59	Sirius Sat. Radio	SIRI		4.02	-0.20
Emmis	EMMS		15.91	-0.16	Spanish Bcg.	SBSA		5.48	+0.02
Entercom	ETM		28.16	-0.36	Univision	UVN		35.45	-0.41
Entravision	EVC		8.14	-0.50	Westwood One	WON		8.61	-0.17
Fisher	FSCI		42.27	-0.34	XM Sat. Radio	XMSR		16.62	-1.01
Gaylord	GET		44.30	-1.15	-	-	-	-	-

Bounceback

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

Now that the Clear Channel debate is over here's an idea: do something to develop and bring business to your future and current advertisers and your communities. When asked by agencies and promoters "Are you a Clear Channel" or Cox or some other mega company? I say "no" and "does that make a difference?" No. Bashing the biggies does nothing for me. Making sure that my stations perform at their best for my community is all that matters!

Tony McIntosh,crmc
General Sales Manager
WTSH/WQTU/WRGA/WSRM
Rome, GA

Below the Fold

Ad Business Report
Univision Radio
Unveils new programming at TV upfront...

Media Business Report
Salem goes for print-on-demand
Acquires Xulon Press, a (POD) digital publisher...

Media Markets & Money
EMF finds a Junior trading partner
has a deal to acquire KTPB-FM...

Washington Media Business Report
Learn from this - KTVO-TV
back on the Radar
Ran afoul of the FCC's regulations on children's advertising...

Internet Media Business Report
Rapid growth of Internet VOD
White paper on its impact on marketers & advertising...

Radio Media Moves

New sideline for Epstein
Boston Red Sox General Manager Theo Epstein will become a radio regular, appearing every other Tuesday on The Hill-Man Morning Show on Entercom's WAAF-FM Boston.

Entercom lawyer jumps to Citadel
Jacquelyn "Jackie" Orr has joined Citadel Broadcasting as General Counsel and Vice President. She was previously Associate Counsel at Entercom.

More News Headlines

Entercom dividend clarified
The 38 cent dividend that Entercom announced this week will, in fact, be its second quarterly payment. Entercom announced in February (2/23/06 RBR #38) that its board of directors had voted to begin paying a quarterly dividend.

Miss America to
salute broadcasters
The NAB Education Foundation announced that Miss America 2006 Jennifer Berry will present the Service to Children Awards at the 2006 NABEF Service to America Awards Gala on Monday, June 12th in Washington, DC. Berry will be presenting the awards to independently-owned KVAK-AM & FM Valdez, AK, and Univision-owned WLTV-TV Miami, FL for their outstanding programs, campaigns and public service announcements produced for the benefit of children.

State Association News

New NAB prez to address MAB
NAB President David Rehr will be a luncheon speaker at the Michigan Association of Broadcasters (MAB) annual Meeting & Leadership Retreat, to be held July 24-26 through at Boyne Mountain Resort in Boyne Falls, Michigan. This year the theme is The New Media Mix. "The continued emergence of new technologies presents challenges to broadcasters in this day and age. By understanding the changing nature of how consumers are enjoying entertainment and receiving information, broadcasters will be able to improve their competitive position in the marketplace," said MAB President and CEO Karole White. Kurt Hanson, Publisher of the Radio and Internet Newsletter, will be the keynote speaker and also moderate a panel discussion on The New Media Mix. Another panel discussion will feature leading Michigan advertising figures.

RBR Radar 2006

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

Moody's turns negative on Emmis
In the wake of the bid by CEO Jeff Smulyan to buy out public shareholders and take Emmis Communications private, Moody's Investors Service has changed the company's outlook to negative, while affirming its current debt ratings. Moody's said it was concerned that the post-buyout entity could have higher leverage than anticipated by the firm's current ratings. For the ratings see
05/17/06 RBR #97

Jeff in showdown with Jeff
on Emmis buyout price
Did the name Noonday Asset Management ring a bell when you heard it was pressing Jeff Smulyan to raise his 15.25 per share bid to buy out the public shareholders of Emmis Communications but you just couldn't quite place it? Try the May issue of RBR/TVBR Solutions Magazine, where Connoisseur Media CEO Jeff Warshaw talks about his new company - and how he has been advising Noonday, a subsidiary of Farallon Capital, since selling his previous radio group.

RBR observation: It is pretty easy to see why Noonday wants more. It was buying Emmis shares in April at prices ranging from 12.78 to 15.54 per share. We doubt that it was their objective to sell those 15.54 shares for 15.25. Emmis continues to trade above 16 bucks a share, so other folks besides Noonday are betting that Smulyan is going to raise his bid. Are you wondering what other broadcasters Noonday owns big pieces of? Then see
05/16/06 RBR #96

Analyst critical of radio receiver
Lehman Brothers analyst Anthony DiClemente has been testing a 299 bucks Boston Acoustic Receptor Radio HD. His bottom line: "Not enough bang for the buck." Yes, he liked the sound quality - "But the digital experience was not entirely user-friendly. is it worth 299 bucks? Not compared to a 2 GB iPod nano that sells for 199. "We believe a tabletop clock HD-radio which includes a CD player could have broader consumer appeal at a lower price point below $150," was DiClemente's conclusion.
05/16/06 RBR #96

Joining in the Clear Channel debate
Scott...Quit Your Bitching! I have heard enough. If you have worked for Clear Channel and you are carrying a grudge, then you need to come to terms with it and move on. If you haven't worked for Clear Channel then you are void of first-hand experience with the company infrastructure and internal programs that would, at the very least, surprise you.

RBR observation: Ouch that had to hurt. Want to join in read and then send your observation to radionews@rbr.com
05/16/06 RBR #96

Univision floodGates:
A marriage made in...Seattle?
Mexican telecommunication giant Televisa is serious about its play for US Hispanic media giant Univision. One of the main things holding it back is its Mexican heritage, which limits it to a 25% stake in US broadcast licenses. However, it has decided to sign up some partners.
05/15/06 RBR #95

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