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Welcome to TVBR's Daily Epaper
Volume 23, Issue 112, Jim Carnegie, Editor & Publisher
Thursday Morning June 8th, 2006

TV News ®

Big shareholder opposes
Tribune stock buyback

When Tribune Company CEO Dennis FitzSimons announced last week that the company's board of directors had approved a 2.2 billion bucks stock buyback (5/31/06 TVBR #106), one thing he didn't mention was that the board vote was not unanimous. Nor was that mentioned in the first two filings that Tribune made with the SEC for its Dutch auction tender offer. So it appears that the dissenting directors insisted on an amendment that has now been filed to include this paragraph: "The Tender Offer was approved by eight of Tribune's 11 directors, with Jeffrey Chandler, Roger Goodan and William Stinehart, Jr. dissenting. Messrs. Chandler, Goodan and Stinehart have also advised the Company that they do not share the opinions of the Company described above. Messrs. Chandler, Goodan and Stinehart were nominated to serve on the Company's Board of Directors by the Chandler Trusts, which collectively own 12.2% of our outstanding shares. See Section 12." So, the tender offer being sent to shareholders will make it clear that the three board representatives of Tribune's second largest shareholder, the Chandler family trusts, don't approve of the big stock buyback. The Chandlers acquired their stake in Tribune when they agreed to merge Times Mirror Company with Tribune in 2000 in a deal then valued at 8.3 billion.

TVBR observation: In the short run, this shouldn't have any impact on the big buyback, which can go forward as scheduled. But if the Tribune Company succeeds in buying back 25% of its public stock, that will increase the percentage owned by the Chandler trusts. Of course, that assumes that the family won't tender any shares, which is not certain. The Wall Street Journal reported that Jeffrey Chandler had declined to say whether or not the family would sell any of its stake. Even with the relative size of their stake increased, the Chandlers wouldn't be able to force a sale of the company or any other transaction not supported by management and the largest shareholder, the McCormick Tribune Foundation. Still, FitzSimons has to deal with a very important and powerful shareholder which is clearly not in 100% agreement with how he is running the company.

Moody's cuts Media General
With Media General taking on debt to buy four stations from NBC for 603 million (4/7/06 TVBR #69), Moody's has lowered the company's ratings a notch. The move puts Media General's publicly traded bonds into junk bond territory, dropping from the lowest investment grade, Baa3, to Ba1. That is significant because some pension funds and such are not allowed to own bonds below investment grade.
| Read More... |

TVBR observation: Not mentioned by Moody's was the other part of Media General's April announcement - that it would be selling four smaller market stations in addition to buying four from NBC. Certainly those sales, with buyers yet to be named, won't amount to 600 million, but they will bring in cash that will quickly improve the leverage picture for the company.


McCain puts a la carte bill
on the agenda

As promised (5/30/06 TVBR #105), Sen. John McCain (R-AZ) has introduced The Consumers Having Options in Cable Entertainment (CHOICE) Act of 2006. The thrust of the bill is to allow consumers to select and pay for only those channels they wish to view. In exchange, participating cable systems would be granted "significant regulatory relief." McCain notes that in on average, consumers receiving 70 channels on their cable system watch only about 17 with any regularity. He made a retirement community in his state a particular example, noting that the senior citizens there have no interest in pricy cable offerings like MTV, but cannot get them replaced with programming more to their liking, not to mention that it comes in on their dime. According to McCain, his bill offers a menu of benefits to cable systems in exchange for offering a la carte: "...video service providers would receive the right to obtain a national franchise; would be permitted to pay lower fees to municipalities for the use of public rights of way; would benefit from a streamlined definition of 'gross video revenue' for the calculation of such fees; and would gain a prohibition on the solicitation of institutional networks, in-kind donation, and unlimited public access channels."

TVBR observation: We have no idea if this bill will gain any traction. It's getting awful close to campaign time, for one thing, and a lot of antsy incumbents figure to be concentrating more on keeping their seat than getting into yet another complex communications issue. If we had to guess, we'd expect the 110th Congress will be sitting before this bill gets a close inspection.

Legislators remind FCC they're on the case
The other day (6/6/06 TVBR #110), discussing the upcoming review of media ownership rules now that the fifth FCC commissioner is seated, we wrote, "In the Senate, Byron Dorgan (D-ND) can be counted on to pay strict attention to what the FCC is doing, and will be joined in equal measure by Maurice Hinchey (D-NY) in the House." Since then, we have learned that both have weighed in on the matter. Dorgan was joined by Trent Lott (R-MS), co-signer of a letter to FCC Chairman Kevin Martin (actually written 5/25/06), requesting that the FCC complete and publicize the results of its Localism Task Force study before making any moves to tackle the rules remanded by the Third Circuit. The senators note that the study of localism commenced in 2003 and the Task Force was assembled in 2004, but since then there hasn't been a peep. The senators concluded, "The FCC must first establish that there are sufficient mechanisms in place to ensure that broadcasters are serving their local communities before loosening of ownership can occur." Hinchey, chair of the 20-member Future of American Media Caucus, went even farther, calling on Martin to restore multiple ownership restrictions long done away with. "If the FCC does in fact consider this issue, then we hope that the Commission will strengthen existing rules, and not further damage an already weak structure intended to protect diversity in American broadcasting," wrote Hinchey in a letter to Martin. "Put simply, we believe that any action on media ownership similar to what was proposed by the FCC in 2003 would be an unmitigated disaster."

Indecency just got
a lot more expensive

All that is needed now is a signature from President George W. Bush and the maximum fine for broadcast indecency will increase ten-fold to 325,000 bucks, as the House yesterday passed a bill which had already cleared the Senate. There is no doubt where Bush stands on the issue. "This legislation will make television and radio more family friendly by allowing the FCC to impose stiffer fines on broadcasters who air obscene or indecent programming. I look forward to signing this important legislation into law," the President said in a statement issued by the White House late yesterday. The legislation easily cleared the House, with only 35 members voting no, while 379 voted yes. In fact, the only real disagreement had been over how much the fines should be raised, as members of Congress on both sides of the aisle tried to build themselves up as "family friendly" following public outcry over Janet Jackson's Super bowl halftime exposure. A bill passed by the House last year would have raised the maximum fine to 500,000, but the lower chamber agreed to go along with the Senate's 325,000 version to ensure that higher fines became law. Groups such as Focus on the Family and the Parents Television Council quickly hailed the House action as welcomed, but long overdue. Meanwhile, AFTRA claimed victory as well, because the version heading to the President's desk does not provide for the FCC to fine individual air personalities, only their employers.

TVBR observation: Now it's off to court - and high time. It is doubtful that President Bush has any idea what a mess the FCC has made of indecency enforcement over the last 30 years or so. US Attorneys do, though, at least any of them who have had the opportunity to take an FCC indecency fine to court for collection. And after looking at the jumbled, erratic way the FCC has changed its definition of indecency from case to case and week to week - it has even put out conflicting decisions on the same day - every one of those US Attorneys has passed on taking a case to court. But with the new exorbitant fines, broadcasters will be less likely to settle and will force a showdown. Several lawsuits against the FCC are already pending and this move to increase fines will just encourage more broadcasters to stand firm and defend themselves. At long last, we are going to get a judge involved who will either throw out the statue altogether or insist that the FCC come up with an indecency standard and then stick to it. Either way, broadcasters will be better off.


Ad Business Report TM

OMD and MTVN strike first
convergent ad deal in the upfront

OMD and MTV Networks (MTVN) have closed a multi-network, multi-platform deal, the first of its kind in this 2006/2007 Upfront season. Under the terms of the agreement, OMD's clients will be the first to receive advertising opportunities across MTVN's diverse portfolio of premier television and online properties. The deal also lays the framework for a joint research partnership.
| Read More... |

Holiday Inn asks travelers
to "Look Again"

Holiday Inn Hotels and Resorts announced a comprehensive multi-million-dollar integrated campaign that asks guests to "Look Again" at the brand. The effort includes, in part, traditional print and broadcast . The comprehensive campaign also includes interactive online and engagement marketing elements. In its first sustaining broadcast campaign since 2002, Holiday Inn takes a humorous look at life on the road for today's business travelers. The commercials from Fallon Minneapolis highlight the brand's key business travel amenities and services, like free high-speed Internet access and Priority Club Rewards, through the eyes of three typical American coworkers at varying levels of experience: Ted, Marcus and Zack, collectively referred to as "The Business Guys." The ads chronicle the antics and interactions of the three coworkers in everyday business travel circumstances. In one ad, the two older "Business Guys," Ted and Marcus, are in the hot tub when Zack enters, sits too close and breaks the understood rule of proper spacing in "hot tub etiquette." In another, Ted and Marcus chide Zack for his lack of Priority Club Rewards points and flaunt the eccentric purchases they have made using points, such as a unicycle and gold golf clubs. The eight, 30-second broadcast spots will debut nationwide 6/10 and air during Major League Baseball and NASCAR coverage on ESPN, ESPN 2, FOX, FX and TNT through November 15, complementing the brand's engagement partnerships.


Washington Media Business Report TM
Stations coming and going
Four more high bidders in FM Auction No. 37 got the go-ahead to pay the rest of their money and send in their CPs. College Creek Broadcasting got the good word for stations in Coarsegold CA and Murdo SD. Hispanic Target Media is cleared for Wellton AZ and L. Topaz Enterprises is cleared for Roscoe SD. They have until 6/21/06 to pay up, with a grace period drop-dead date of 7/6/06 appended. Meanwhile, two stations have been declared dead by the FCc. WQMA-AM Marks MS, licensed to Jason Konarz and KLPL-FM Lake Providence LA, licensed to Willis Broadcasting Corp. have had their licenses cancelled and call letters deleted.


Entertainment Media Business Report TM
Kids' WB! to debut "Spider Riders"
Kids' WB! will debut a animated series, Spider Riders, from Cookie Jar Entertainment's action brand, Coliseum, on Saturday, 6/17, with a special one-hour block of back-to-back episodes from 10:30-11:30 a.m. ET. On 6/24, Kids' WB! will present another one-hour block of Spider Riders from 10:30-11:30 a.m. ET. On Saturday, 7/1, during the holiday weekend, Kids' WB! will feature a Spider Riders two-hour, four-episode mini-marathon from 10:00 a.m.-12:00 noon ET. On 7/8, Spider Riders will move into its regularly scheduled time period (10:30-11:00 a.m. ET). Spider Riders is a co-production between Cookie Jar Entertainment and leading Japanese ad agency, Yomiko, together with Japanese animation studio, Bee Train.

NBC offering Leno on iTunes
NBC is now offering more of "Tonight" for tomorrow as fans of "The Tonight Show with Jay Leno" can now access the late-night show's full monologue plus comedy sketches the very next day on iTunes. Viewers will have access to the five most recent clips, which are available for 1.99 each. In addition, viewers can subscribe to a "multi-pass" by pre-purchasing a month's worth of monologues (20) for 9.99. The announcement marks an enhancement of the feature first offered in 12/05 when The Tonight Show gave fans the opportunity to sample limited two-to-five minute editions of the previous night's comedy monologue that included such favorites as 'Headlines" and "Best of Jaywalking."


Cable Business Report TM
Cablevison countersues TV network
Cablevision is fighting back against being sued by the major TV networks and Hollywood studios (5/26/06 TVBR #104) by filing its own lawsuit against them. The MSO's countersuit insists that its proposed networked digital video recorder (DVR) system is protected by legal precedents of "fair use" and doesn't violate the copyrights of the networks and studios. While the proposed networked DVR system, which is to be first deployed on Long Island, uses centralized storage capacity, Cablevision insists that consumers will be making personal copies of programs as allowed by copyright law and that the cable company itself is not retransmitting copied programs.


Internet Media Business Report TM
TiVo announces TiVoCast
TiVo has jumped into the online space with the launch of TiVoCast, a new service that will deliver broadband video directly to the television sets of TiVo subscribers. TiVoCast turns web video into television by bringing broadband content now only available on the PC to the TV set. As part of the launch, TiVo announced that it has reached new agreements with leading video content providers including the NBA and Women's National Basketball Association (WNBA), The New York Times, Heavy, iVillage and CNET among others.
| The broadband video content will include |

Pump Audio delivers music for CBS's innertube
Pump Audio, a provider of quality independent music to content creators globally, announced CBS has selected its music to accompany two of its original series for its new broadband channel, innertube. Tracks from Pump Audio's catalog of independent musicians provide the musical backdrop for Greek To Chic, a college-based makeover reality series that premiered last month, and BBQ Bill, an upcoming scripted sketch-comedy series.


Ratings & Research
Trump tops with TiVoers
The next-to-last episode of "The Apprentice" may have been well down in the Nielsen ratings (tied for #20), but it was tops with TiVo users. No doubt the finale will also be a hit in this week's ratings. We note that TiVo owners are unusual in being big fans of ABC's ratings challenged and soon to disappear "Commander in Chief."
| Tivo Top 25 |


TVBR Stats
Satellite tops cable in six markets
That's the latest word from the Television Bureau of Advertising (TVB), which analyzes Nielsen data to determine the penetration of alternated delivery services (ADS) for television - satellite (mostly), wireless cable and such - and for wired cable. TVB reports that the wired cable MSOs lost 1.8 million subscribers over the past year and dropped to a 15-year low of 63.4% US household penetration. ADS penetration increased to 22.6% as of May 2006 from 20.5% a year earlier. Those six markets where there are now more ADS than cable subscribers include one in the top 100, #77 Springfield, MO, and five smaller markets, #130 Chico-Redding, CA, #132 Columbus, MS, #163 Idaho Falls-Pocatello, ID, #168 Missoula, MT, and #192 Twin Falls, ID. Here are the large, medium and small markets with the highest ADS penetration.
| Read More... |

TVBR observation: Hmmmm, did something happen last year in Springfield, MO? We seem to recall something about Nexstar Broadcasting pulling its signals from local cable in a dispute over retransmission consent payments. It has since settled and those network affiliate channels are back on local cable - but the satellite guys got a market share boost from the fight.


Transactions
217.5M WKCF-TV Orlando-Daytona Beach-Melbourne FL (Clermont FL) from Emmis Television License LLC, a subsidiary of Emmis Communications Corp. (Jeffrey Smulyan) to Orlando Hearst-Argyle Television Inc., a subsidiary of Hearst-Argyle Television Inc. (David J. Barrett). Cash. Duopoly with WESH-TV Daytona Beach. WKCF is WB affiliate on Channel 18 (headed for DT 17 and CW Network). WESH is NBC affiliate on Channel 2. [File date 5/15/06.]


Stock Talk
Pessimism rules
Bargain hunters moved into the market on Wednesday, but their efforts did not prove to be enough to counter the sell-off that has been running this week as Fed officials jawboned about inflation worries and indicated that rate hikes are not over. The Dow Industrials fell back below the 11K mark, dropping 71 points, or 0.7%, to 10,931.

TV stocks did a bit better, turning in a mixed performance. ACME gained 3.6% as the best performer. CBS rose 1.5% for its widely held Class B and was up 1.8% for Class A shares. Gray had a mixed day all by itself, with its common shares down 1.1% and its Class A shares up 1.1%. Go figure.


Stocks

Here's how stocks fared on Wednesday

Company Symbol Close Change Company Symbol Close Change

Acme

ACME

5.24

+0.18

LIN TV

TVL

8.69

-0.04

Belo

BLC

16.93

-0.10

McGraw-Hill

MHP

51.55

+0.55

CBS CI. B CBS

26.68

+0.40

Media General

MEG

37.16

+0.01

CBS CI. A CBSa

26.72

+0.47

Meredith

MDP

50.25

+0.14

Clear Channel

CCU

30.58

+0.13

News Corp.

NWS

20.06

unch

Disney

DIS

30.65

+0.12

Nexstar

NXST

5.15

-0.07

Emmis

EMMS

16.25

-0.02

NY Times

NYT

24.09

+0.10

Entravision

EVC

7.96

-0.06

Ion Media

ION

0.88

unch

Fisher

FSCI

42.48

-0.21

Saga Commun.

SGA

9.40

-0.05

Gannett

GCI

53.55

+0.62

SBS

SBSA

5.40

unch

Gen. Electric

GE

34.40

-0.15

Scripps

SSP

46.98

+0.56

Granite

GBTVK

0.23

+0.02

Sinclair

SBGI

8.18

-0.13

Gray

GTN

6.32

-0.07

Time Warner

TWX

17.61

-0.02

Gray, C1. A

GTNa

6.55

+0.07

Tribune

TRB

30.31

+0.31

Hearst-Argyle

HTV

22.03

+0.09

Univision

UVN

35.75

+0.02

Journal Comm.

JRN

11.52

+0.05

Wash. Post

WPO

791.43

-3.32

Lincoln Natl.

LNC

56.68

-0.21

Young

YBTVA

3.76

+0.14


Bounceback

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TV Media Moves

A familiar name...
Former Salomon Smith Barney media analyst Niraj Gupta is now at Pequot Capital, where he will be covering the global media and telecommunications industries for a newly launched Telecom, Media and Technology Fund.


Below the Fold

Ad Business Report
OMD and MTVN strike first
Convergent ad deal in the upfront...

Cable Business Report
Cablevison countersues
Fighting back against major TV nets and Hollywood studios...

Entertainment Media
Business Report

Kids' WB! to debut
"Spider Riders" a animated series...

Internet Media Business Report
TiVo announces TiVoCast
Jumped into the online space will deliver broadband video...

Ratings & Research
Trump tops with TiVoers
"The Apprentice" down in ratings (tied for #20), but tops with TiVo...


More News Headlines

House scheduled to cope with COPE today
Joe Barton (R-TX) is scheduled to shepherd his telecom rewrite, the Communications Opportunity, Promotion and Enhancement Act of 2006, through the House floor today. The main thrust of the bill is to ease franchising requirements to grease the wheels for telcos to get into the MVPD business and compete directly with cable operators. One part of the bill concerning net neutrality is sparking a furious lobbying and media campaign, with most of the money coming from telcos who want no part of the concept. One group, the American Consumer Institute, says it has conducted an empirical study which shows that consumers may end up footing a bill as high as 24B-32B if such a measure is enacted. However, interest groups on both the left and right side of the political spectrum, and notably, consumer groups such as the Consumer Federation of America, are doing everything they can to make sure that net neutrality is not only maintained, but he the FCC has the teeth to make sure the concept is enforced. Either way, the Barton bill does not figure to be the final word on the topic. A Senate version is open to the concept of net neutrality and a left-wing/right-ring pairing in the House Judiciary Committee, Jim Sensenbrenner (R-WI) and John Conyers (D-MI) have introduced the Internet Freedom and Nondiscrimination Act of 2006, which would support the concept of net neutrality. Also, Democrats including Energy and Commerce Committee leaders John Dingell (D-MI) and Ed Markey (D-MA) said they will introduce an build-out amendment requiring market entrants to expeditiously provide their service to all market households, preventing discrimination against poorer neighborhoods.


TVBR Radar 2006
Television News you won't read any where else. TVBR--First, Accurate, and Independently Owned.

Smaller Buffet table
in store for newspapers?
Wall Street legend Warren Buffett did not have good news for newspapers, in comments published by HyperGene MediaBlog. He noted that they remain extremely profitable, but in the face of rapidly increasing competition for consumer attention and increasing alternative news sources, not to mention the tastes and habits of the younger demos, newspapers can expect a future of unbroken annual 5% decreases in revenue.

TVBR observation: Before anyone in broadcasting starts popping champagne corks, Buffett included broadcast television in his eulogy. When there were three major broadcast pipelines (ABC, CBS & NBC), it made sense for big retail to pay big bucks to use them as paths to consumers. Cable brought that to an end and now is in turn under assault from satellite and telco in its own right. All we know is that the old business models are going away, and new models need to take their place as swiftly and effectively as possible. Broadcast and newspaper do have one anchor which other media cannot offer nearly as well, which we will state in three simple words. Don't forget them. The three simple words are local, local and local.
06/07/06 TVBR #111

Live Nation spin-off
paying off for shareholders

If you are a Clear Channel shareholder who sold off the Live Nation shares you received when the former CC Entertainment was spun off, you may wish you'd held on for a while. Nearly six months after separating from the Clear Channel mother ship, Live Nation's stock is up 120%.

TVBR observation: We had wondered whether the Mays family would dump their shares of Live Nation and bid adieu to a disappointing investment that had cost Clear Channel billions of bucks. But no, they have not. The three have continued to be directors. More in
06/07/06 TVBR #111

TV could follow radio results "significant miss"
That's the view from Wachovia Securities analyst Marci Ryvicker, who looked at the RAB numbers and cut her 2006 forecast to a gain of only 0.7%. And she warns this may not be the last time she cuts her estimate for radio revenues. Ryvicker had expected April revenues to be down 1%, but what RAB reported late Friday was a 4% decline. Ryvicker isn't recommending any radio stocks. She is now looking for the industry to post a 1% drop in Q2 revenues, down from her previous +1% estimate. She is still maintaining a positive number for all of 2006, but not by much - forecasting a 0.7% revenue gain, down from her previous 1.3% estimate. But Ryvicker warns that this may not be the last time she has to reduce her radio forecast.

TVBR observation: Radio had been counting on inventory pressure from television to provide a big boost in the second half of this year. But with automotive so weak for TV as well, political advertising may not push too much other advertising off of TV this fall. While TV should do better than radio by comparison, the real worry now is that both are likely to be in the same boat in 2007 - with soft demand, no big events (Olympics or political) to soak up inventory and no catalyst (at least none that can yet be seen) to boost advertiser interest in broadcasting.
06/06/06 TVBR #110

Online newspaper ads
jump 35% in Q1
Ad expenditures for newspaper websites increased by 34.9% to 613 million in Q1 versus the same period a year ago. Print and online expenditures together totaled 11.1 billion for Q1, a 1.8% year-over-year increase. Spending for print ads in newspapers totaled 10.5 billion, up 0.3% versus the same period a year earlier led by strong gains in real estate advertising.

TVBR observation: We have heard this electronic media talk at the 4A's and TVB this year but understanding the world of electronic media is not complex. Its only complex if you are not there and still stuck in 2003. Newspaper has grabbed this quickly so TV groups this is your last year to get on board or other media will pass you by. Do not believe us then go back and see how Wall Street is projecting radio's revenue growth as TV is not far behind in issue
06/06/06 TVBR #110

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.

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. Details see
06/05/06 TVBR #109

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.

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. Details see
06/05/06 TVBR #109


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