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Volume 23, Issue 106, Jim Carnegie, Editor & Publisher
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Wednesday Morning May 31st, 2006
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TV News ®
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 Tribune may sell some TV stations;
buying back its own stock
Tribune Company announced a Dutch auction to buy back up to 53 million shares in a range of 28.00-32.50 (above Friday's close of 27.89) from the public and 10 million from the foundations that are its largest shareholders. CEO Dennis FitzSimons says Tribune will also cut expenses some 200 million (including some staff cuts) and sell up to 500 million in non-core assets, possibly including some non-core TV stations. FitzSimons says, however, that nothing in the top three markets - New York, Los Angeles and Chicago - is for sale. He specifically said the Chicago Cubs baseball team is not for sale, since it is so important to the company's radio and TV stations in Chicago - and that blanket statement that nothing in the top three will be sold also ruled out any sale of Tribune's lone radio station, WGN-AM Chicago. So, what is for sale? In a conference call with Wall Street analysts, FitzSimons acknowledged that Tribune might consider selling its stake in the Food Network, although he praised partner Scripps for its management of the venture and said growth at the cable net is so good that it is more valuable to keep the cash flow than to sell at prices that have so far been discussed. In answer to an analyst's question, FitzSimons said Tribune will consider selling some assets that are EBITDA generating. "For example, certain television stations that are non-core to our program buying strategy are something that we would consider [selling]," the CEO said. He did not identify any specific markets, but said the first sales could be announced in a few weeks. According to the BIAfn MediaAccess Pro database, Tribune's smallest markets with full-power TV stations are Albany, NY (#55), New Orleans, LA (#43), Harrisburg, PA (#41) and Grand Rapids, MI (#39).
Here is how the Dutch auction will work. The tender offer that began yesterday is scheduled to expire June 26th. Tribune will buy shares at the lowest tender price within the 28.00-32.50 range that will allow it to buy 53 million shares. All tendering shareholders will receive the same price, even if they offered to sell at a lower price. Tribune will also buy 10 million shares from the McCormick Tribune Foundation and the Cantigny Foundation at the same price paid in the Dutch auction. The foundations, which periodically sell shares to fund their philanthropy, will continue to be major Tribune shareholders. What about the Chandler family, which holds a big stake from merging Times Mirror into Tribune? FitzSimons said the Chandlers are still considering whether to tender any shares, but he noted that Tribune management will not tender any shares - preferring to bank on future growth. Even after the tender, Tribune won't be through buying back its own stock. The company says it may buy back up to an additional 12 million shares through open market purchases. All in all, it looks like Tribune may end up spending about 2.2 billion to buy back 75 million shares of its stock.
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 Withers slices off a piece of Pittsburgh
Monongalia County WV is between the Clarksburg-Weston WV DMA, where Withers Broadcasting Company's CBS WDTV-TV makes its home (it is licensed to Weston), and Pittsburgh, home of CBS O&O KDKA-TV. Although Nielsen counts the county in the latter market, Russ Withers has successfully petitioned the FCC to redefine it as part of WDTV territory. Withers had a number of arguments which swayed the Commission over the objections of KDKA and another station which filed in opposition. First, it has traditionally been carried on cable systems in the county, going back to 1965 in its key municipality of Morgantown. It argued that it's physically closer to the market than are any Pittsburgh stations. Further, WDTV employs a news reporter to the Monongalia County beat, actively sells advertising to businesses there, provides programming of interest to its residents (more so than any Pittsburgh stations), and draws ratings from its residents. KDKA admitted it was more distant, but argued that Nielsen counted the county as part of Pittsburgh with good reason and that it outdraws WDTV in terms of viewers. The FCC found that Withers made sound arguments, and though KDKA's claim to higher ratings was true, the ratings were nevertheless in the same ballpark.
TVBR observation: As we understand it, this ruling does not constitute a territory grab for the entire Clarksburg-Weston market, but rather a special market definition for WDTV alone. As for KDKA, it told the FCC that it feared another CBS affiliate being home to the market since cable operators would be required to carry duplicative programming, and if it opts to take one only, WDTV would win on grounds of proximity. It looks like KDKA is now exposed to that possibility. Bottom line: If you have a gripe, air it. You do have a chance to prevail if you can make a good enough case.
Journal settles lawsuit; takes charge
Journal Communications says it will record a 5.1 million bucks reduction in revenues for Q2 for advertising credits to settle a lawsuit over circulation numbers for the Milwaukee Journal Sentinel. The company says it expects to recoup some of the loss from its insurer. While the settlement will affect the bottom line at Journal, the company said it stands by its guidance for Q2 operating results - revenues of 196-201 million and 14-16 million in net earnings. To settle the litigation, which had been filed as a class action lawsuit by Shorewest Realtors, Journal will provide credits to run-of-press advertisers of the Milwaukee newspaper. Also included in the 5.1 million is a voluntary offer by the company to preprint advertisers of credits toward 2007 advertising related to changes that were made to the newspaper's paid net circulation numbers for 2003 and 2004. The Milwaukee Journal Sentinel is the only daily newspaper owned by Journal Communications. It also owns some 90 community newspapers and shoppers, 37 radio stations and nine TV stations, plus two others that it operates.
 One step closer to Gov. Spitzer?
New York Attorney General Eliot Spitzer is expected to have the backing of the Democratic Party in his run for governor, and he's expected to win that effort, according to the Associated Press. That would end 12 years of Republican residence as the state's top executive, all belonging to the resume of George Pataki. Spitzer has gotten national headlines in his campaign against payola, getting large settlements from record companies and putting a great deal of heat on several large radio groups.
TVBR observation: If the broadcasting and recording industries had final say, Spitzer would have trouble getting himself elected dogcatcher. On the plus side, if elected he will have to start worrying about budgets, taxes, education and other issues. On the minus side, if his ink helps drive his campaign all the way to the governor's mansion, he may be the kind of example to other AGs that we don't really need.
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| Wall Street Media Business Report TM |
Tribune settles with SEC
The Securities and Exchange Commission yesterday concluded its investigation into inflated newspaper circulation figures by charging Tribune Company with reporting falsified circulation figures from at least January 2002 to March 2004 for two of its newspapers in New York - Newsday and the Spanish-language Hoy. The SEC issued an order finding that Tribune failed to uncover Newsday and Hoy's inflated circulation figures because it lacked sufficient internal controls to detect the schemes at those papers. In a separate proceeding, nine former employees and contractors of Newsday and Hoy pleaded guilty to various criminal charges in the United States District Court for the Eastern District of New York in connection with the same scheme. In settling the matter, Tribune noted that it had changed circulation management at the papers and received no penalty other than a cease and desist order. "We launched an extensive internal investigation immediately after allegations of circulation improprieties were made regarding Newsday and Hoy. We gave the SEC and other federal, state and local authorities our full cooperation and began communicating with our advertisers from the outset. We're happy the SEC's findings are consistent with our own investigation results and that we have closed this matter," said Tribune CEO Dennis FitzSimons.
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Ad Business Report TM
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 Chrysler Media Day
(from March's RBR/TVBR Solutions Magazine)
Chrysler Media Day, held annually in the Detroit area, is attended by just about every radio, television and cable network and rep firm, magazine, internet and newspaper conglomerate in the biz. Here we ask Christine McKenzie, Chrysler Group Executive Director of Brand Events and Agency Relations, what it's all about:
| Read More... |
Exostar taps Corporate Ink as AOR
Exostar, the Aerospace and Defense industry's secure collaborative business network, has tapped Corporate Ink to highlight how it is transforming the Aerospace and Defense and related industries with secure networked solutions that link clients, contractors and more than 23,000 key suppliers. Exostar is an independent company initially founded to support the complex supply chain needs for five of the biggest names in the global A&D market: The Boeing Company, BAE Systems, Raytheon, Rolls-Royce, and Lockheed Martin. Today, Exostar serves seven of the top 10 global A&D manufacturers with services in supply chain, collaboration and security.
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| Washington Media Business Report TM |
NAB welcomes fifth commissioner
In Washington, an appointment and confirmation nearly always signals the onset of a letterfest. Everyone on all points of the political and ideological spectrum puts finger to keyboard to offer their heartfelt congratulations to the newly anointed, if only to keep their own name before the public. Brand new FCC Commissioner Robert McDowell is no exception. However, it can be said without fear of contradiction that the National Association of Broadcasters has some fish to fry over at the FCC, and would dearly love to see some action on the matters of broadcast/newspaper cross-ownership and reasonably useful television duopoly rules in struggling smaller markets. Those issues were going nowhere with a two-two stand-off on the 8th Floor. The gift of a tie-breaking vote for Chairman Kevin Martin opens the possibility of movement on these tough issues, so no doubt the sincerity of the following statement from NAB President/CEO David Rehr is unimpeachable. "NAB congratulates Robert McDowell upon his confirmation as the fifth FCC Commissioner. His background and extensive knowledge of communications issues will serve Mr. McDowell well in his new position. NAB looks forward to working with him, Chairman Martin and the other commissioners as the FCC addresses broadcast related issues pending at the Commission."
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| Entertainment Media Business Report TM |
Today's the day: Bye-bye Katie
NBC has been playing it for all it is worth - and getting lots of free publicity in all sorts of media. Katie Couric makes her last appearance as co-host of the "Today" show this morning, ending a 15 year run. She'll have some time away from the camera and then the spotlight will shift to CBS in September for the debut of the "CBS Evening News with Katie Couric."
 Desperate Housewives clears only
Fox-owned MyNetworkTV stations
Lloyd Komesar, Buena Vista Television EVP/Strategic Research clarified with us that the recent deal clearing Desperate Housewives on MyNetwork TV is not entirely correct as reported (5/30/06 TVBR #105): "Buena Vista sold the program to the Fox-owned television stations that are affiliated with the new MyNetwork TV. This is not a deal across all affiliates of this new network, which is what your text suggests. Buena Vista is continuing its successful sales roll out of the program for weekend syndication as we speak."
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| Internet Media Business Report TM |
MySpace creates campaign for ''An Inconvenient Truth''
MySpace.com, the leading Internet lifestyle portal, announced it has joined forces with Al Gore to create an "unprecedented" campaign for the global warming documentary, "An Inconvenient Truth." The campaign launched yesterday and runs for the next several weeks. The campaign includes a custom-designed community to raise awareness and facilitate conversation about global warming. Among other features, the community's home page offers a personal environmental impact calculator so every user can assess his/her individual contribution to global warming. The site also provides facts about global warming and useful tips for reducing carbon emissions and living a green lifestyle. MySpace's Music channel will feature an Artist on Artist interview between Gore and a world-renowned musician who is part of the MySpace community. The MySpace Movies channel will spotlight an interview with the film's director, Davis Guggenheim. MySpace is also contributing ad space to raise awareness about the threats posed by global warming. The campaign will also move beyond MySpace's online network, culminating in a 10-city MySpace theater buyout on 6/16 with free tickets going to members of "An Inconvenient Truth's" MySpace community.
 Baskin-Robbins invites America
to "Find the Pink Spoon"
Baskin-Robbins has launched "Find the Pink Spoon," an online game and nationwide mobile tour that incorporates the company's iconic pink spoon in a fun and interactive way. The online game encourages consumers to search for hidden pink spoons that can be found by answering a variety of trivia questions. The "Road Trip" hits the highway taking the adventure offline and bringing a mobile tour across the country visiting various cities and towns throughout June and July. The online game is the first of its kind to combine a trivia game with the latest in interactive mapping technology. The game kicked off yesterday and encourages players to answer trivia questions that lead to a Baskin-Robbins pink spoon, hidden in a secret location within the US on a map powered by Yahoo! Maps. The game provides a chance to win 13 grand prizes, worth more than 100,000. Hitting the road 6/8 in San Francisco, the mobile tour will make stops in Sacramento, Los Angeles, San Diego, Phoenix, Washington, D.C., and New York before concluding in Chicago on 7/17.
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| Ratings & Research |
DMA unveils "Reaching the US Hispanic Market"
The Direct Marketing Association (DMA) released market research on Hispanic consumers' attitudes and purchasing habits via direct marketing channels. "Reaching The US Hispanic Market: Consumer Attitudes and Buying Behavior Report" demonstrates the many positive aspects about Hispanic consumers' experiences with buying direct. A nationwide sample of Hispanics, in which 10,000 records were used, was the basis for the study. Quotas were set for 70% of respondents to be direct response buyers and/or donors and 30% non-buyers. 1,116 respondents (788 direct buyers/donors and 328 non-buyers) completed interviews for the analysis. Of those 788 individuals who made purchases from mail, catalog, online, telephone, or DRTV offers or who made donations, 36% purchased through more than one channel.
| See highlights here |
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| Stock Talk |
Stocks take a tumble
Oil prices moved up and Wal-Mart issued a weak sales report, raising worries about the retail sector. In other words, Tuesday was not a happy day on Wall Street. The Dow Industrials fell 184 points, or 1.6%, to 11,094.
Most TV stocks joined the retreat. A notable exception was Tribune, up 7.2% as it announced a big stock buyback. Gray Television had the worst day, with its common down 4.5% and Class A off 3.6%.
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| Stocks |
Here's how stocks fared on Tuesday
| Company |
Symbol |
Close |
Change |
Company |
Symbol |
Close |
Change |
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Acme
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ACME
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4.95
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+0.15
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LIN TV
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TVL
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9.00
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-0.18
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Belo
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BLC
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17.18
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+0.02
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McGraw-Hill
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MHP
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51.26
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-1.09
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| CBS CI. B |
CBS |
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25.51
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-0.69
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Media General
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MEG
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37.71
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-0.63
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| CBS CI. A |
CBSa |
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25.55
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-0.62
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Meredith
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MDP
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49.96
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+0.07
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Clear Channel
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CCU
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30.74
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-0.26
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News Corp.
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NWS
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19.81
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-0.17
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Disney
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DIS
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30.20
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-0.31
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Nexstar
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NXST
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5.15
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unch
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Emmis
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EMMS
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15.98
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-0.17
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NY Times
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NYT
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24.35
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+0.07
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Entravision
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EVC
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7.76
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-0.15
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Ion Media
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ION
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0.83
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unch
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Fisher
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FSCI
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42.60
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-0.40
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Saga Commun.
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SGA
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9.25
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-0.36
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Gannett
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GCI
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54.23
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+0.32
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SBS
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SBSA
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5.43
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-0.13
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Gen. Electric
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GE
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34.05
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-0.28
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Scripps
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SSP
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46.50
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+0.03
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Granite
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GBTVK
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0.22
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-0.03
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Sinclair
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SBGI
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8.22
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-0.23
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Gray
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GTN
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6.61
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-0.31
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Time Warner
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TWX
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17.22
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-0.22
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Gray, C1. A
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GTNa
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6.65
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-0.25
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Tribune
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TRB
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29.90
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+2.01
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Hearst-Argyle
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HTV
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22.04
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-0.44
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Univision
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UVN
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35.66
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-0.43
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Journal Comm.
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JRN
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11.75
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-0.06
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Wash. Post
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WPO
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799.03
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+6.62
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Lincoln Natl.
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LNC
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55.58
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-0.93
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Young
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YBTVA
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3.20
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+0.07
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Bounceback
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 We want to
hear from you.
This is your column, so send your comments and
a photo to tvnews@rbr.com
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TV Media Moves
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Green to work weekends
Lisa Green has been named senior planning producer of "Today," Weekend Edition, effective June 13. She will replace Steve Majors, who will serve as senior producer in NBC News' New Orleans Bureau. Green currently serves as the senior producer of Broadcast Standards for NBC News and is a contributor to the Daily Nightly blog of "NBC Nightly News with Brian Williams."
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Below the Fold
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Ad Business Report
Chrysler Media Day
Christine McKenzie
discusses the day...
Washington Media Business Report
NAB welcomes fifth commissioner
Everyone sends the congrats...
Entertainment Media
Business Report
Desperate Housewives clears only
Fox-owned MyNetworkTV stations...
Internet Media Business Report
MySpace creates campaign
For ''An Inconvenient Truth'' joined forces with Al Gore...
Ratings & Research
Hispanic consumers' attitudes
DMA unveils "Reaching the US Hispanic Market"...
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More News Headlines
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Freedom renews CBS in West Palm Beach
Freedom Broadcasting and CBS Corporation jointly announced that WPEC-TV (Ch. 12) has renewed its affiliation with the CBS Television Network under a new long-term agreement, although the exact length wasn't disclosed. "We are extremely proud to continue our 16-year partnership with CBS," said Freedom President Doreen Wade. West Palm Beach is an unusual market in that CBS owns the local UPN affiliate, WTVX-TV (Ch. 34), which will become a CW affiliate this fall, along with five radio stations, but not the CBS TV affiliate.
Clear Channel siblings separate in Cincinnati
It is quite common for radio and TV stations in the same market to partner up for news, weather and promotions - and also common for the partnerships to change. But what is unusual in Cincinnati is that WLW-AM is ditching WKRC-TV (Ch. 12, CBS), although both are owned by Clear Channel, to team up with Hearst-Argyle's WLWT-TV (Ch. 5, NBC). As the call letters indicate, the two were commonly owned many years ago. According to the Cincinnati Enquirer, management of WKRC wasn't told in advance and was stunned by the announcement of the partnership change, which will take effect August 1st. WKRC will continue to be affiliated with the other seven Clear Channel radio stations in the Cincinnati market.
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Download Now
May '06 RBR/TVBR Solutions Magazine
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TVBR Radar 2006
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Television News you won't read any where else. TVBR--First, Accurate, and Independently Owned.
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VNU buyer wants bonds too
Now that Valcon, created by a consortium of equity funds, has won the right to buy out shareholders of VNU for 9.7 billion bucks it is offering to buy out most bondholders as well. The soon-to-be owner of Nielsen Media Research, Billboard magazine and other VNU properties is making a tender offer for nearly 1.3 billion bucks of VNU's public debt. To facilitate the bond buyback, VNU has called a series of meetings for June 19th and 20th for holders to vote on approving the redemption of some or all of the bonds at 100% of their face value, plus accrued and unpaid interest.
TVBR observation: We wait now for the bigger moves. Who will be the new CEO, as VNU gets a new name and moves its incorporation from The Netherlands to the US? What role will Nielsen Media Research President and CEO Susan Whiting play? TVBR hears that Whiting's star is on the rise as she was the guiding light through this storm. Bottom line: When the CEO is appointed that will give some idea on the focus of the company.
05/30/06 TVBR #105
The top 25 TV groups
It only takes 135.7M in 2005 annual income to make the BIA Financial Network list of Top 25 Television Station groups, but it takes almost 17 times that amount to get to the top of the list. The top guns are see
05/30/06 TVBR #105
Too much leverage?
Bear Stearns analyst Victor Miller is concerned that most publicly traded TV companies are over leveraged. Thus, he likes LIN's plan to sell off its Puerto Rico properties and pay down debt. In an extensive analysis piece sent out Friday, Miller noted that Wall Street appears to be punishing the stock prices of the pure-play TV companies with the highest debt-to-EBITDA ratios - Young at 19.3 times and Nexstar at 7.6 times, while awarding the highest value to Hearst-Argyle, the least leveraged at 3.2 times. For more details on Too Much Leverage see
05/30/06 TVBR #105
TV is cyclical; get used to it
Mark Fratrik, VP and Chief Economist for BIA Financial Network (BIAfn), is predicting that US television stations will take in 22.2 billion in revenues this year, up more than 7% from 2005. However, the bulk of that 1.5 billion gain from last year's 20.7 billion is going to come from political spending, continuing the two-year pattern that has become increasingly apparent in recent years. Back in the 1980s and '90s, growth in other major ad categories, led by automotive, could be counted on to fill the growth gap in non-election years. "We don't have that anymore," Fratrik told TVBR. "Local television stations are in precarious positions and must think creatively to drum up new revenue streams....Those revenue streams are small now, but five years out he predicts that some smaller broadcasters may generate up to 25% of their revenues and 40% of their cash flow from platforms other than their main TV channel.
TVBR observation: Fratrik has a keen forecasting eye better than your average Wall Street guru because he has the experience of broadcasting. Fratrik is also correct on the new revenue streams must be built and natured along as it will take a little time. Most broadcast companies that have survived the recession and bootstrap rebuilding process with a strong brand will take the profits over the next 4 years. Another shake out is coming for those who have not prepared.
05/26/06 TVBR #104
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