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Volume 23, Issue 109, Jim Carnegie, Editor & Publisher
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Monday Morning June 5th, 2006
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TV News ®
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Univision bidding war begins this week
There is been No Official Announcement, nor do we expect one, but by all accounts first round bids for Univision are due this Thursday (6/8). It seems pretty certain there will be at least two bids, making it possible that Jerry Perenchio, pictured, will get the 13 billion plus that he's hoping for. Televisa CEO Emilio Azcarraga Jean has ruled out any possibility of doing business with rival media mogul Haim Saban, either before or after the bidding. A Reuters report from Mexico City quoted Azcarraga Jean as saying that Televisa would not negotiate with any other party if its group does not win the bidding. The Televisa group is seen as having a leg up, since it already owns 11% of Univision and could increase its stake to as much as 25% under US foreign ownership rules. It has an existing contract that requires it to provide programming to Univision through 2017. In addition to Televisa, that bidding group includes KKR, Bain Capital, Carlyle Group, Blackstone Group and Bill Gates' personal investment company, Cascade Investment. As reported last month (5/19/06 TVBR #99), Saban, who became a billionaire from the Mighty Morphin Power Rangers, has joined the bidding group formed by Madison Dearborn, Providence Equity Partneres, Thomas H. Lee Partners and Texas Pacific Group. Several mega-media companies have reportedly looked at Univision, but most have decided that either the price is too high or the FCC's ownership limits would require too many spin-offs. But rumors persist that a third bidder may be in the mix.
TVBR observation: Univision shareholders have been rejoicing at the news that Emilio Azcarraga Jean does not want anything to do with the Haim Saban group. A consortium of consortia could have left Univision in the position that VNU was recently in - with only one bidder stepping up to the plate. The VNU deal finally got done, but the sellers didn't walk away with smiles on their faces.
Univision, Entravision set to score big
That is the view of Lehman Brothers analyst Anthony DiClemente, who sees the 2006 World Cup soccer championship, beginning June 9th, bringing big bucks to Univision, which has the US Spanish broadcast TV rights, and Entravision, which owns the largest group of Univision affiliate stations (besides the O&O group). "We expect Univision to book about USD195 million of gross revenues associated with the World Cup (or 134 million net), more than double the 63 million of ad revenues booked by the 2002 World Cup," DiClemente said in a note to investors. This year the big soccer championship is taking place in Germany, so all matches will begin in the US between 6:00 am and 3:00 pm ET, while four years ago most of the matches from South Korea and Japan took place 1:30-7:30 am ET. Not only will the event itself draw ad buys, but DiClemente sees the impact continuing onward. "We believe both Univision and Entravision will experience a halo effect associated with the World Cup, as new advertisers brought in by the event are likely to continue advertising with the broadcasters beyond July," he said.
NAB wants to set up set-top procedure
The National Telecommunications and Information Administration (NTIA) is getting ready to create a voucher program for households re-question a digital-to-analog set-top converter box in time to for the DTV conversion, set for 2/17/09. The National Association of Broadcasters (NAB), along with numerous other organizations, has stepped forward to aid NTIA in this effort. For now, the coalition wants to mount an effective educational campaign with the 5M dollars allocated by Congress for that purpose. It a unified message "...disseminated widely across media and non-media outlers, and through such avenues as community centers, libgraries, toll-free information lines and the Web." The coalition is also calling for a program which will enable ordering the set-top boxes over the Internet via an electronic debit card, which would take into account current consumer buying behavior and help to reduce fraud. The diverse group of groups signatory to the letter along with the NAB includes Alliance for Public Technology, Alliance for Rural Television, American Library Association, Association of Public Television Stations, Big Idea Inc., Consumer Electronics Association, Consumer Electronics Retailers Association, Entravision Communications Corporation, Harris Corporation, ION Media Networks, LG Electronics USA, Inc., National Alliance of State Broadcasters Associations, National Consumers League, Public Broadcasting Service, Scholastic Inc. and Women Involved in Farm Economics.
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McDowell takes the oath
"I am honored and humbled to be joining such a distinguished group of commissioners as well as the fine career public servants at the FCC." Those were the words of brand new FCC Commissioner #5 Robert McDowell (and more to the point, Republican FCC Commissioner #3). The FCC's 8th Floor is now full to current capacity. McDowell continued, "There are many challenging issues facing the Commission, and I am eager to begin working on them with my fellow commissioners, with Congress, and with the American people. I am confident that our efforts will help bring the most advanced and efficient communications systems in the world to all American consumers."
TVBR observation: Let the consideration of controversial and divisive issues begin. McDowell's background is in the telco area of FCC oversight. That may not be the best news for cable when push comes to shove in the MVPD competition wars. Despite his lack of a broadcast resume, there are a number of hot-button issues there as well, mostly relating to the remanded media ownership rules initially approved by the commission 6/2/03. And apparently, first up may be the cable v. broadcasting battle over multicast must-carry. Should be an interesting Summer.
Ad brouhaha uncorked in Tennessee
Bott Radio Network's WCRV-AM Memphis has been dutifully running ads from Republican US Senate candidate Bob Corker because it feels it must do so under the law. However, according to the Chattanooga Times, Bott management is airing editorials noting that the only reason it is running the Corker ads is because it feels compelled and further makes the case that Corker has changed his position over the years on the hot-button issue of abortion while obliquely endorsing an opponent. This has kicked off at least a mini-firestorm. On the direct level, while Bott thinks Corker's ad contains inaccuracies, Corker thinks Bott's editorials are inaccurate. Various viewpoints are also coming from those with a greater degree of separation from the issue. Some question whether the editorials themselves are legal. Others question why Corker would run ads on a small station with an audience he is unlikely to turn into supporters no matter what he does.
TVBR observation: Interesting case. It stands to reason that a station should be allowed to run an editorial and endorse a candidate. Newspapers do so all the time. On the other hand, this could be construed as a donation to the campaign of Corker's opponent, requiring equal free time for rebuttal from Corker. The play-it-safe position we would suggest is to run whatever bona fide candidates and interest groups want to run without comment. If you simply must get into the endorsement game, do so with care. The local car dealer wants to sell cars to everybody regardless of political affiliation, and will not be happy if you chase half your audience away just so you can spout off at will. Further, we'd make sure there is a reasonable amount of separation between your editorials and the paid political speech you are running on your station. And have your lawyer on retainer. You may be walking close to the legal edge.
CCU gets class action suit
over concert competition
Clear Channel was hit with a lawsuit on Friday of violating antitrust laws by curtailing concert competition and hiking up ticket prices. The class-action suit, filed in Denver federal court, names CC Radio and former concert promotion unit Live Nation as defendants. The suit accuses CCU of limiting spins for musicians who used competing concert promoters and inflating musicians' fees, to exclude competitors from the market. It asks for unspecified monetary damages on behalf of all buyers of tickets to concerts promoted by the defendants from 6/98 to 12/05 in Colorado, Utah, New Mexico, Arizona, Kansas, Wyoming and Nebraska. From 7/03-2/06, DOJ probed allegations that CC tied radio airplay and the use of concert venues to musicians' use of the companies' concert promotion services. The lawsuit said the investigation was reportedly discontinued because CC agreed to spin off Live Nation. "However, Live Nation and Clear Channel Communications Inc. both continue to be dominated by the same individuals," Reuters reported the suit as saying.
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Ad Business Report TM
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Donchin on the upfront
Andy Donchin, Carat Americas Director of Broadcast Buying, spoke with us on Friday for his take on the state of upfront negotiations. Last week, buyers confirmed, for the most part, things were stalled due to the Live +7 ratings controversy (6/2/06 TVBR #108).
Said Donchin: "Yes, it's a little bit stalled. We're working through some issues. If it is what it is in terms of the total dollars, there's really no great need to rush into it. We have the luxury of time to iron out all these issues-form partnerships, talk about and digest these issues. We'll also get into the marketplace and do deals that not only involve television time, but possibly digital extensions. The more complicated marketplace that we are in will result in good deals for both sides."
Any programming options that are catching your attention?
"All four major broadcast networks have something. We're still being drawn towards network television and we're still being drawn to cable networks that make sense for us and can provide us good added value. I think 'the death of television' has been greatly exaggerated. We still very much know it works for us, although we know we've got to include other things now."
Do you agree Live +7 is holding a lot of things up right now?
"I think it's an issue that we have to iron out before I think we can move forward."
Should we get a quick meeting together somewhere for the major players to hash it out?
"No, this may sound somewhat stupid, but we figure it out every year, whatever the issues are. We'll figure this out, and obviously it is something that's being discussed. Hopefully at the end, we'll figure out a way to move forward."
Northwestern Mutual's new campaign
puts clients' minds at ease
Northwestern Mutual, long recognized as "the quiet company," is launching an ad campaign that gets to the heart of one of the biggest concerns people have in life--their lack of confidence regarding their financial future. This new campaign, "Interrupted Moments," shows viewers that the company's financial reps understand their customer's issues and how to address them. National television spots will begin airing during the French Open tennis tournament on 6/9. The media strategy will include 30-second spots on marquee network television events including the French Open, the Belmont Stakes, U.S. Opens (tennis and golf) as well as NBC's Emmy Awards. On cable, the company has added ESPN, ESPN2, History, National Geographic and Travel Channels to its solid lineup of news, sports and lifestyle networks. Northwestern Mutual is also a presenting sponsor of National Geographic's "Space Race," airing on 6/4. Print appears in top business, finance, news, thought-leader and epicurean publications, along with general interest titles like Conde Nast Traveler, Real Simple and Sports Illustrated. This year's online schedule covers finance (e.g. CNNMoney.com), news, women's interest, sports (PGA.com) and search categories including Yahoo. Creative was developed by Downtown Partners Chicago, which was named as Northwestern Mutual's new advertising agency in July, 2005.
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| Media Markets & Money TM |
EBC takes a baby step into Grand Rapids
Larry Morton and Equity Broadcasting Corp. (EBC) is adding to its extensive collection of low power television stations (it also has a collection of the full-powered variety). It is buying WUHQ-LP in Grand Rapids MI from Robert Naismith and his P&P Cable Holdings. According to broker Doyle Hadden, who handled the transaction, the price tag is 350K. EBC will utilize the licensee name Marquette Broadcasting Inc. when filling out the requisite FCC paperwork.
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| Washington Media Business Report TM |
Legal eagle eye view of the
FCC Super Bowl ruling
Attorney Peter Gutmann of Womble Carlyle Sandridge & Rice, PLLC has looked over the FCC's decision to uphold its 550K fine charged to CBS Television and its O&Os over the infamous Super Bowl wardrobe malfunction courtesy of Janet Jackson and Justin Timberlake. After expressing surprise at how quickly the decision was turned around and made public, he found some points worth the attention of broadcasters who are vulnerable to the same type of event taking place on their own airspace. As usual, WCS&R PLLC warns that this is provided for general information is not to be used as legal advice.
| Read It Here |
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| Internet Media Business Report TM |
Verizon launches "FiOS TV Widgets"
Following the rollout of Verizon FiOS TV, Verizon is adding an interactive weather and traffic feature to complement its fiber-optic television service. Called FiOS TV Widgets, the service is available at no additional cost to customers with a set-top box, and is the first of several product enhancements that will let subscribers control and share entertainment and information throughout the home. Later this year, Verizon will add a multi-room DVR and a feature that lets customers' access PC-based photos and music on their televisions. Additional new services are planned for 2007. FiOS TV Widgets supplies one-touch, on-demand access to real-time local weather and traffic information. Subscribers use their remote control to display text-based weather and traffic on their TV screens without interrupting the program they are watching. For example, parents leaving the house for a Saturday morning of errands can get the latest traffic update without interrupting the kids' cartoon show. Future Widgets enhancements may include personalized news, sports scores and fantasy-league sports results or community information. Widgets is a software upgrade to the FiOS TV system and requires no additional equipment or service calls.
Emmis offers iTunes on websites;
adds content
Emmis Communications announced it is the first company in the nation to integrate the iTunes Music Store into its radio station Web sites. The integration of the iTunes Music Store will reflect the programming of each radio station, allowing listeners to shop from playlists of station artists as well as top picks from on-air talent and celebrity guests. Emmis' national rollout of the integrated storefronts began Friday with Chicago alt-rocker WKQX-FM (www.Q101.com), and Indianapolis contemporary-hits station WNOU-FM (www.radionow931.com). The iTunes integration will roll out to all Emmis radio markets in the next month. The next stations scheduled to adopt the new feature are KROX-FM (101X) and KDHT-FM (Hot 93.3) in Austin, and KPNT-FM (The Point) in St. Louis. Emmis successfully piloted the Music Store integration last month at two stations, New York's WQHT-FM (Hot 97) and Los Angeles' KPWR (Power 106).
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| Ratings & Research |
Season wrap-up: "Idol" dominates
You already know that CBS won the 2005-2006 for total viewership and Fox for the key 18-49 demo, but what was the most-watched show? It is not too hard to guess that it was "American Idol" on Fox - the Tuesday edition (which featured new performances each week) was #1 with a 17.6 average HH rating and 27 share, with the Wednesday edition close behind at 17.2/26. The top show for CBS was "CSI" at #3 and ABC put "Desperate Housewives" well up in the #4 spot. You have to go down to #16 for the top performer on NBC, "Deal or No Deal" (Monday), in a tie with the lesser side of ABC's "Dancing With the Stars," the Thursday results show. Care to guess the absolute last place show? It was a tie for #372 between three Pax/i shows at 0.1/0: "Body & Soul" (Sunday), "Cold Turkey 2" and "Palmetto Pointe," with the latter having the absolute smallest audience. Here are the top 25 for the just-past season.
| View the Chart |
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| Monday Morning Makers & Shakers |
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Transactions: 4/17/06-4/21/06
Station trading as filed in the matter part of the middle of April was a mixed bag to say the least. There was a rare two-market radio-TV combination sale, a wide variety of market sizes, and there were eight, count 'em, eight FM CPs, mostly in unrated markets, transferred to American Family Association for no consideration. As you will see below, Colorado Springs was the epicenter.
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Total
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Total Deals
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19
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AMs
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8
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FMs
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11
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TVs
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3
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| Value |
75.331M
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| Complete Charts |
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Radio Transactions of the Week
Broadcaster busts into Colorado market
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TV Transactions of the Week
Publisher Springs into two Colorado markets
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| Transactions |
7.25M WRSP-TV & WCCU-TV Champaign-Springfield-Decatur IL (Springfield, Urbana IL) from Springfield Broadcasting Partners, a subsidiary of Bahakel Broadcasting Co. (Beverly B. Poston et al) to GOCOM Media of Illinois LLC (Richard L. Gorman). 500K escrow, balance in cash at closing. 15K allocated to non-compete. WRSP is Fox affiliate on Channel 57; WCCU is Fox station & 18-year satellite of WRSP on Channel 27. There is no overlap between stations. Buyer is applying for waiver to continue this arrangement. [File date 5/10/06.]
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| Stock Talk |
A mixed day to end the week
Confusion on Wall Street led to a mixed close on Friday. The reason for the confusion? The Labor Department's monthly jobs report showed a slowdown in new hiring for May. That might make the Fed less likely to continue raising rates. But it also was such a big job creation slowdown that some experts are afraid the economy may be cooling down too much. The Dow Industrials ended Friday down 12 points at 11,248, while the S&P 500 was up slightly and the Nasdaq Composite down slightly.
TV stocks were also mixed. Sinclair was down 2.9% as the worst performer. The best was ACME, up 1.8%, which pulled it back out of penny stock territory.
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| Stocks |
Here's how stocks fared on Friday
| Company |
Symbol |
Close |
Change |
Company |
Symbol |
Close |
Change |
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Acme
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ACME
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5.08
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+0.09
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LIN TV
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TVL
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9.03
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-0.17
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Belo
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BLC
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17.22
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-0.07
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McGraw-Hill
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MHP
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51.91
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+0.19
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| CBS CI. B |
CBS |
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26.45
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-0.19
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Media General
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MEG
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38.06
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-0.15
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| CBS CI. A |
CBSa |
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26.48
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-0.14
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Meredith
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MDP
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50.99
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+0.18
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Clear Channel
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CCU
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31.16
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-0.21
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News Corp.
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NWS
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20.46
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-0.01
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Disney
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DIS
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30.60
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-0.02
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Nexstar
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NXST
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5.18
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-0.10
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Emmis
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EMMS
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16.57
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+0.22
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NY Times
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NYT
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24.20
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-0.31
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Entravision
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EVC
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8.19
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+0.10
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Ion Media
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ION
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0.86
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+0.02
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Fisher
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FSCI
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43.12
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-0.88
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Saga Commun.
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SGA
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10.34
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+0.01
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Gannett
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GCI
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54.29
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-0.39
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SBS
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SBSA
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5.52
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-0.03
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Gen. Electric
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GE
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34.65
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+0.10
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Scripps
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SSP
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46.41
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-0.27
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Granite
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GBTVK
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0.21
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-0.01
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Sinclair
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SBGI
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8.49
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-0.25
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Gray
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GTN
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6.52
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-0.15
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Time Warner
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TWX
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17.57
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+0.17
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Gray, C1. A
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GTNa
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6.50
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-0.16
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Tribune
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TRB
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29.94
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+0.12
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Hearst-Argyle
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HTV
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22.24
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-0.14
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Univision
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UVN
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36.40
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-0.05
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Journal Comm.
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JRN
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11.64
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+0.05
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Wash. Post
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WPO
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807.20
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-2.55
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Lincoln Natl.
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LNC
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57.32
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+0.58
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Young
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YBTVA
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3.32
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+0.01
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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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Kirtman returns
Nate Kirtman has returned to the TV business after stints at General Electric's corporate operation and its aviation business. He is now back at NBC Universal Television Group as President of Publicity, overseeing overall media strategy, planning and communications efforts.
SWMX names
James Caci CFO
SoftWave Media Exchange, an electronic marketplace for the purchase, sale, management and distribution of advertising media time, announced James Caci has been named Chief Financial Officer, reporting to Josh Wexler, SWMX CEO. "Jim is a tremendous addition to our organization and will play a critical role in executing our strategy for growth," said Wexler. "As we continue to capture market share in radio and prepare to expand into additional formats, his experience and insight will be invaluable in setting a sound financial foundation on which to build." Prior to joining SWMX, Caci served nearly four years as CFO, VP/Finance for Global Consultants, Inc.
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Below the Fold
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Ad Business Report
Andy Donchin on the upfront
Yes, it's a little bit stalled. We're working through some issues...
Media Markets & Money
EBC takes a baby step
Into Grand Rapids adding to its extensive collection of low power TV stations...
Washington Media Business Report
Legal eagle eye view
Of the FCC Super Bowl ruling...
Entertainment Media
Business Report
Emmis offers iTunes
On websites; adds content...
Ratings & Research
Season wrap-up:
"Idol" dominates as CBS won over all but Fox won the key 18-49 demo...
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More News Headlines
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Copter crashes into GA tower; damage threatens another
An Army helicopter crashed after smashing into the upper portion of Barrington Broadcasting's WFXL-TV Albany, GA (FOX) 1,000-foot tower. The collision caused a guy wire to break loose, opening the possibility it could collapse. The co-pilot was the only survivor of the crash near Doerun, GA. WFXL's over-the-air broadcast is gone, but they are seen through cable TV. The tower is 125 feet away from Raycom's WALB-TV (NBC) tower. There is concern that if the WFXL tower falls, it will damage or bring down the WALB tower. A tower repair crew will be called in, and it is likely that the tower will have to be taken apart piece by piece, possibly by helicopter, starting with the removal of the eight-ton antenna. WFXL should be back on air by today, barring storms.
Brinson Foundation
grant supports
debate exhibit at
Museum of Broadcast
Communications
The Brinson Foundation awarded 100,000 to The Museum of Broadcast Communications (MBC) to support an exhibit on the 45-year history of televised presidential debates. Tracing the relationship between politics and television, this exhibit will be part of the MBC's new facility in downtown Chicago, scheduled to be completed in Spring 2007. The centerpiece of the Presidential Debates exhibit will be one of the CBS cameras used in the first televised debate between Richard Nixon and John Kennedy at WBBM/Chicago in 1960. This grant, which is payable over two years, complements the 50,000 Brinson Foundation grant given to the MBC in 2005 for the digitization of the Museum's vast political collection.
National Health Partners announces
Hispanic DR campaign with Univision
National Health Partners, a provider of discount healthcare membership programs, launched its national Hispanic advertising campaign 6/1 via television spots featuring international superstar entertainer Lucia Mendez on Univision. Said David Daniels, National Health Partners CEO: "Over the next few weeks, we will be expanding our Hispanic advertising campaign nationally to include major metropolitan cities like Miami, Chicago, Los Angeles and New York and will be airing our commercials on top-rated Hispanic television shows like Sabado Gigante, Don Francisco and Cristina. Our television commercials will be part of a fully integrated advertising campaign that will include such other media as radio and print ads." The direct response effort will be utilizing one of the largest call centers in the US, "...with more than 300 bilingual sales representatives working each 8-hour shift to handle the tremendous overflow of calls that we will receive when our commercials air on Sabado Gigante, Don Francisco and Cristina starting within the next 10 days," added Daniels.
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RBR - Radio News
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April drags 2006 into the red
At the end of the first quarter, radio revenue for 2006 was at par with 2005. That is no longer the case as weak results for April yanked total revenues into the minus column, according to the Radio Advertising Bureau and its report on Miller, Kaplan, Arase & Co. numbers. Local was down 4%, and a three-month positive streak for the national category came to an end with a minus 7% performance. Once again, there is a flip side as radio stations continued to find new sources of revenue, resulting in an 8% gain in non-spot income. In the end, national and non-spot cancelled one another out, bringing total revenue home at the same minus 4% figure which applied to the all-important local category. YTD, local is down 2%, national is even and non-spot is up 9%, resulting in a bottom line total of minus 1%. The comp at the end of March had been even.
RBR observation: A common theme during the latest round of conference calls, when looking ahead, was murkiness in the near term with positive signs for the second half of the year. April results prove that broadcast management staking this position was correct about the near-term. Let us hope they are equally correct about third and fourth quarters. If nothing else, another hot election year should help inch the overall numbers toward the black.
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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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Debt raters turn thumbs down
on Trib stock buyback
Two billion plus in stock buybacks may be good news for Tribune Company shareholders but the ratings agencies say that's not the case for its bank lenders and bondholders. Moody's, S&P and Fitch have all cut their ratings on Tribune since the stock buyback announcement. As it stands now, all three have given Tribune their lowest investment grade rating. Should the company fully execute the share repurchase plan, a non-investment grade rating is likely. The review will also focus on management's commitment to reducing leverage in the event that only a portion of the share repurchase program is executed."
TVBR observation: Much could be hinging on CEO Dennis FitzSimons' successful execution of the related plan to sell off a half billion bucks worth of non-core assets, including some smaller market TV stations (yet to be identified). That, along with some 200 million in overhead reductions, will improve the leverage situation and perhaps put Tribune back in the good graces of the ratings companies. But if the asset sales are slow to come together, Tribune could find itself with junk bond ratings - and have to pay more for what it borrows.
06/02/06 TVBR #108
Upfront update: buyers comment
The upfront marketplace is still stalled, thanks to the Live +7 controversy. Said one buyer: "When the marketplace gears up, it will likely be flat to down. It's not that the advertisers' budgets are down, it's just that the budgets for TV have been cut back and carved out by brand managers who want to experiment in environments that might be psychographically appropriate for the brands vs. putting all their money to television." More in Ad Business Report section in
06/02/06 TVBR #108
Martin to change
channels on multicast?
It looks like FCC Chairman Kevin Martin will make multicast must-carry one of the first issues to tackle once he has a third Republican vote in place in the form of Robert McDowell. The Michael Powell FCC already called this broadcast v. cable bout in favor of cable, so the fact that it appears to be up for reconsideration can only be good news for broadcasters. According to reports, the matter could hit the FCC agenda by mid-July or earlier.
06/01/06 TVBR #107
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