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Volume 24, Issue 119, Jim Carnegie, Editor & Publisher
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Tuesday Morning June 19th, 2007
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TV News ®
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 Second bid in the works
for Dow Jones?
A lot of virtual ink has been spilled on the topic of Rupert Murdoch's attempts to romance Dow Jones & Company and its cornerstone publication, The Wall Street Journal. But a coalition is coming together to form a new bidder on the block which may be able to rival the 5B George Washingtons which Murdoch has been waving at Dow stockholders. Wall Street Journal itself reported that another group of potential buyers, if not making direct eye contact, were discussing a possible bid for the iconic media company. Pearson PLC, publisher of Financial Times, and General Electric are the possible bidders. They are considering an offering which would take the company private and keep the Bancroft family on board with a minority stake. Thus far the Bancrofts have been balking at the idea of letting Murdoch have the company. If the deal comes to fruition, it would combine the Journal and Dow Jones products with FT and with GE's CNBC. Pearson has many other financial news products, including Barron's, half of magazine Economist and numerous business newspapers abroad.
TVBR observation: It's not much of an auction with only one vocal person in the audience, so this must be very welcome news at Dow Jones. Nothing like another serious bidder to get a stockholder's blood flowing.
Rockefeller comes out swinging next week
Tuesday next, 6/26/07 at 10AM, is now on the schedule of the Senate Committee on Commerce, Science and Transportation. And the topic is bound to bring out the finest oratory the assembled senators can muster: "Impact of Media Violence on Children." We expect to hear some of the details of the upcoming bill from Sen. Jay Rockefeller (D-WV). The FCC issued a hurried report earlier this past spring on the topic, suggesting that Congress was well within its rights to come up with some kind of legislation restricting violent content on the nation's airwaves. The FCC noted that any such legislation would have to be narrowly tailored to get around First Amendment concerns, and was conspicuously short of details as to just how that task was to be accomplished. Rockefeller has taken the anti-violent mantle from retired Sen. Fritz Hollings (D-SC), who tried for years to push bills through Congress to no avail. According to reports, one of the options favored by FCC Chairman Kevin Martin, a la carte cable channel menus, will not be part of Rockefeller's bill.
TVBR observation: We fully expect that anything Rockefeller comes up with will follow the Hollings efforts onto the legislative slag heap. The hearing should provide plenty of entertainment - senators and witnesses will be able to indulge in lurid descriptions of all types of mayhem - but they will not have any credible evidence linking broadcast violence directly to real violence, and lacking that, the Constitution will easily prevail over this misguided effort at playing national nanny.
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TNS lowers its expectations, TV mixed
Back in January, TNS Media Intelligence was looking for a 2.6% overall gain in US advertising revenues. It no longer thinks that less-than-lofty goal is attainable, and has lowered it's prediction to 1.7%. That will be the result of a scant 1.2% gain for the first half of the year, amplified by a 2.3% pick-up in the second half. TNS's President/CEO Steven J. Fredericks said, "The advertising market has moved onto a slower track than we thought possible just six months ago. We expect the overall pace of activity will pick up slightly in the second half of the year. However, it still appears that total measured expenditures will post their smallest annual gain since the 2001 advertising recession as marketers continue to incrementally scale back their allocations to off-line media in favor of less expensive digital alternatives." Feeling the most pain, red-digit pain, will be spot TV (-5.5%), newspapers (-2.9%), BTB magazines (-1.5%) and radio (-0.3%). Internet is the only significant gainer (16%), but other outlets are predicted to do OK, such as cable network (5.9%), outdoor (4.6%), consumer/Sunday magazines (4.5%), and Hispanic media (3.7%). Expected to experience modest gains are network TV (1.3%) and syndicated TV (1.2%).
 Mr. Gonzales, tear down this merger
The proposed merger of DARS companies XM and Sirius found another obscure source of support, from an organization called WIPP. You've heard of it? No? That would be Women Impacting Public Policy, who think the merger would be good for small businesses, women and minorities. The loyal opposition to the merger also found voice, in the form of a letter to AG Alberto Gonzales, FCC Chair Kevin Martin and FTC Chair Deborah Platt Majoras, signed by a bipartisan group of no less than 72 US Representatives. "On the face of it," they wrote, "we believe that sanctioning the marriage of the only competitors in the satellite radio market would create a monopoly which would be devastating to consumers." The letter notes the anti-monopoly safeguards put in place by the FCC at the outset of the DARS license grants, and notes the questionable behavior exhibited by the two companies since. "Present circumstances do not warrant the FCC's complete reversal of its conclusions in the satellite radio licensing decision, or the consumer benefits and protections that have resulted from that decision...We call on the Department of Justice, the FCC and the FTC to protect consumers, and protect competition, by denying this merger." Gene Green (D-TX) and James Sensenbrenner (R-WI) led the effort.
TVBR observation: As one source noted, the list of signatories goes all the way from Dennis Hastert (R-IL) to Dennis Kucinich (D-OH). Although weighted toward the Democratic side of the aisle, key Republicans, in particular actual radio operator Greg Walden (R-OR), contributed their John Hancocks from the Republican side. In all, 47 Democrats and 25 Republicans signed the letter. Note that the group did not say "consider the proposal carefully" or "it faces a high hurdle." The group flatly said the proposal should be denied. The statement can't be much stronger than that.
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| Wall Street Media Business Report TM |
 Take no Prisoner attitude
Terry Semel is out as the Chief Executive Officer at Yahoo! and Jerry Yang is in and ends what experts say was a long 6 year rocky road for the CEO Semel who came from Warner Brothers. This management shake-up does not surprise anyone in the internet world given the fact that Yahoo! has suffered financial troubles over the past year. But also losing market share and face to Google. Yahoo! has seen its market price slide since 2006 from 43 bucks to less than 30 dollars a share.
TVBR observation: When the top dog is kicked out of the house it shows one thing about those guys in the Internet business. They take no prisoners.
Gannett can't wait for politics to heat up
Another multimedia company is suffering from the two-year political roller coaster on the television side, and is simply suffering, period, on the newspaper side. Gannett says for the month of May, pro forma operating revenues were down 6% overall, and that it would have been even worse had the company not been benefiting from favorable exchange rates of US dollars for British pounds. Television was said to be down 8.9% on a pro forma basis, thanks to the absence of political revenue, and Q2 is pacing lower than the same period in 2006 in the high-single digits.
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Ad Business Report TM
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DQ's Waffle Treats selling like hotcakes
MediaPost reports Dairy Queen's new waffle bowl product line is shaping up to be the most successful product launch for the chain since the Blizzard, a near billion-dollar brand that made its debut in 1985. The first month's rollout of the waffle bowls and cones has generated the highest per-store sales in more than three-and-a-half years, said Chief Brand Officer Michael Keller. The launch is on track to become a 100- to-150-million brand this season, the story said. "We've been watching waffle bowls for a couple of years now, and decided it was time," Keller told MediaPost. "We have a value advantage and with gas prices what they are and the economy where it is, we think this can be very attractive to consumers." Dairy Queen has put 25 million in marketing support behind the launch. It's "Made for Each Other" national TV spots via Grey Worldwide are being supported with social media including a MySpace page. The digital initiatives are being promoted on in-store displays, through the 1.3-million member Blizzard Fan Club, on TV and radio spots.
Editor's note: We recently interviewed Keller, who told us DQ was "a pretty sleepy brand for a very long time and for a couple of decades was doing very little in the marketplace. In the last three or four we have been working very hard to grow this brand, both through same store sales as well as new store development. One of the areas we felt like we had a large number of opportunities in was on the new product front. Whether those were flavor and size extensions off of our current product platforms or they were new product platforms, we felt like we had opportunities to grow our sales through new product introductions."
| See the interview here-page 12-13 |
 Wal-Mart asks for
dismissal of Roehm suit
MarketWatch.com reported Wal-Mart Stores has asked a state court in Michigan to dismiss the lawsuit filed by fired SVP/Marketing Communications Julie Roehm contending she lives in Arkansas. Roehm, who has been at the heart of a series of accusations about ethics breaches, was fired in December after only 10 months on the job after leaving a similar high-profile position at Chrysler in Michigan. Her suit claims breach of contract and was followed by a countersuit from Wal-Mart with similar charges. Last month Roehm responded to the suit, lobbing charges of ethics breaches by a number of Wal-Mart execs, including CEO Lee Scott (6/5/07 TVBR #109), On Wednesday, Wal-Mart filed to have the entire case thrown out over confusion about where Roehm lives, according to the story. She has residences in Michigan and Arkansas, but has paid taxes from Arkansas and has an Arkansas driver's license, according to lawsuits. Wal-Mart filed the motion on the basis the complaint should have been filed in Arkansas, Simley said. What's more, her employment contract specifies that if there were a dispute it would be heard in Arkansas. "And, it's an inconvenient venue," Simley said, "because all of the witnesses are in Arkansas." If the judge upholds the request, Roehm's case will be thrown out of Michigan court and to continue it, she'll need to refile in Arkansas.
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| Media Markets & Money TM |
Meredith adds an online feature
Television and magazine company Meredith Corporation has picked up an internet interest which may be of interest to its audience of 75M women that it reaches one way or another, once a month, in print or over the web. The acquisition is Healia, a health and medical search engine which helps users locate high quality info online. Meredith Publishing Group President Jack Griffin said, "The acquisition of Healia is an important step in our strategic initiatives to expand our reach in the women's health market and to provide content-focused services online." The price was not disclosed. The company said there will be no immediate financial impact on the company.
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| Washington Media Business Report TM |
 Key senators press FCC
for swift Tribune assessment
The proposed Sam Zell/ESOP acquisition of Tribune Company is pending, with a major sticking point in the form of five broadcast/newspaper cross-ownership platforms which have been challenged by various watchdogs. A trio of heavy hitters in the US Senate have fired off a letter to FCC Chairman Kevin Martin asking for expeditious consideration of the transaction. While the trio stops short of renewing the waivers/grandfather clauses which allow the combinations to exist, their call for swift FCC action will at least get all the cards on the table as soon as possible. And here's the best news for Zell: The trio are all Democrats, the most likely to object to such a merger. Hometown legislator Dick Durbin (D-IL) was joined by Chuck Schumer (D-NY) and Majority Leader Harry Reid (D-NV) in writing the letter.
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| Ratings & Research |
Premium SMS a third of mobile content revenue
According to the latest Telephia Premium SMS Report, Premium SMS revenues totaled more than 273 million, making up 32% of mobile content revenue in Q1. This report includes content purchased via premium SMS from off-portal storefronts as well as premium text messaging services, like voting/sweepstakes and chat. Download purchases paid for via premium SMS (at off-portal storefronts) totaled nearly 215 million, accounting for 79% of premium SMS revenue. These off-portal storefront purchases include content such as ringtones and horoscopes. Voting/sweepstakes entries generated more than 35 million, reported The Center for Media Research. While voting/sweepstakes entries generated only 13% of total revenues for premium SMS transactions, they represented 47% of premium SMS volume, equaling more than 34 million transactions. Said Kanishka Agarwal, vice president of mobile media, Telephia: "Premium text messaging continues to be an additional way to reach consumers directly... (with) a healthy slice of the mobile content market, accounting for an off-portal share of 32%... marketers are experimenting beyond the standard rate SMS voting pioneered by American Idol and tapping into premium SMS with voting/sweepstakes campaigns. NBC's Deal or No Deal has translated into a premium SMS hit, generating nearly half of the volume and revenue of voting/sweepstakes entries in the first quarter of 2007."
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| Internet Media Business Report TM |
NBC.com delivers 300 million video streams
NBC.com announced it has served a third of a billion video streams since 10/06, which marked the launch of the full episode video player. The announcement was made by Vivi Zigler, EVP/NBC Digital Entertainment and New Media. "The entertainment experience no longer begins and ends with the broadcast," said Zigler. "Streaming video is allowing fans to catch up on their favorite shows, sample new programming and continue their interaction with their favorite content." NBC.com offers users a multitude of video streaming options including full episodes, two-minute replays, deleted scenes, webisodes and web exclusive series, previews and clips. The site offers full episode streaming for "30 Rock," "Age of Love," "Andy Barker, PI," "The Black Donnellys," "Friday Night Lights," "Heroes," "Last Comic Standing," "Medium," "Miss Universe 2007," "Passions," "Raines" and "Studio 60." Programs with two-minute replays include "30 Rock," "Age of Love," "America's Got Talent," "The Apprentice," "The Black Donnellys," "ER," "Friday Night Lights," "Heroes," "Last Comic Standing," "Medium," "My Name is Earl," "The Office," "Scrubs" and "Studio 60." NBC.com web exclusives include "Jay Leno's Garage," "The Office Deleted Scenes," "SNL Backstage" and Conan O'Brien's "Pale Force."
 Slacker, Pandora want internet radio in cars
The Wall Street Journal wrote yesterday on the move to get Internet radio into the mainstream and into cars. Slacker Inc.'s 36-year-old founder Celite Milbrandt demonstrated his mobile service for potential investors at the annual Consumer Electronics Show and ultimately raked in an additional 40 million in investments for his company. "Start-ups are racing to move Internet radio, largely listened to via computers, into mobile products. Portability could make Internet radio operators a greater threat to the traditional radio industry. The next big goal is integrating Web radio into car dashboards. Two companies -- Slacker and Pandora -- say they're talking to auto makers in Detroit," WSJ said. More excerpts from the story:
| Read More... |
TVBR observation: Seems Slacker is just a cheaper version of satellite. The real deal is when consumers can get stable internet audio on their car stereos, and choose whatever existing streaming stations they wish-from Melbourne, Australia to Melbourne, FL. Consumers want internet in the car, they want thousands of streaming choices, not just music channels tailored to their tastes. We have iPods for that. Certainly, the appeal of internet radio includes terrestrial and internet-only stations in other cities with personalities, production and imagination. Song after song after song with no on-air talent isn't even what satellite radio has acquiesced to. Listeners appreciate talented MDs and on-air talent that can take them through a musical adventure--live. We need more WiFi/WiMax zones to make this happen, or more efficient/reliable, less expensive services from the major cellular providers. It's all coming, but we don't see Slacker and Pandora as offering anything by their own specific, albeit user-tailored channels-like satellite. Of course, the new CRB rates, if left unchecked, will likely kill all of this, altogether!
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| Stock Talk |
All quiet of the Wall Street front
Reports note that there was little for investors to react to yesterday, so the Street eased up on the accelerator and slowed down a bit. To find out if your favorite stock rode this gentle current downward, or bucked the trend, check below.
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| Stocks |
Here's how stocks fared on Monday
| Company |
Symbol |
Close |
Change |
Company |
Symbol |
Close |
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Acme
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ACME
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4.89
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-0.02
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Lincoln Natl.
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LNC
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72.20
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-0.04
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Belo
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BLC
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21.86
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+0.02
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LIN TV
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TVL
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19.58
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-0.29
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| CBS CI. B |
CBS |
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33.39
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+0.16
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McGraw-Hill
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MHP
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71.08
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+0.08
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| CBS CI. A |
CBSa |
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33.38
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+0.19
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Media General
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MEG
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34.32
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+0.52
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Clear Channel
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CCU
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38.30
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-0.04
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Meredith
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MDP
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61.77
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-0.14
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Disney
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DIS
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34.54
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+0.14
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News Corp.
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NWS
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23.62
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-0.34
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Emmis
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EMMS
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9.70
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+0.09
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Nexstar
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NXST
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13.75
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+0.40
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Entravision
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EVC
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10.73
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+0.13
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Ion Media
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ION
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1.39
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-0.07
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| Equity Media |
EMDA |
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4.25 |
+0.05 |
Saga Commun.
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SGA
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10.00
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-0.02
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Fisher
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FSCI
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50.93
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-0.95
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SBS
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SBSA
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4.44
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unch
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Gannett
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GCI
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57.22
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-0.55
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Scripps
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SSP
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45.24
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-0.49
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Gen. Electric
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GE
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38.07
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-0.05
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Sinclair
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SBGI
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15.12
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+0.01
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| Google |
GOOG |
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515.20
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+9.31
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SWMX
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SWMX
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0.09
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-0.03
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Gray
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GTN
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9.56
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+0.02
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Time Warner
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TWX
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20.89
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-0.01
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Gray, C1. A
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GTNa
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9.71
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+0.21
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Tribune
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TRB
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30.43
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+0.03
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Hearst-Argyle
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HTV
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24.70
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-0.22
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Wash. Post
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WPO
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772.00
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-0.30
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Journal Comm.
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JRN
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13.33
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-0.37
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Young
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YBTVA
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3.66
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+0.02
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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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Below the Fold
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Ad Business Report
DQ's Waffle Treats
Selling like hotcakes, TVBR recently interviewed Michael Keller Chief Brand Officer for DQ he stated...
Media Markets & Money
Meredith adds an online feature
Picked up an internet interest which may be of interest to its audience of...
Internet Media Business Report
300 million video streams
NBC.com has served a third of a billion video streams since 10/06...
Ratings & Research
Premium SMS
A third of mobile content revenue...
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Stations for Sale
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 Market your Stations For Sale
in our daily epapers.
Contact
June Barnes
jbarnes@rbr.com
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More News Headlines
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DIY launches
"Celebrity Rides"
DIY Network, on Sunday, June 24 at 9 p.m. ET, debuts "Celebrity Rides," the net's newest automotive franchise. Featuring high profile personalities and their love of cars, the program kicks off with Celebrity Rides, a special featuring Jay Leno, his Big Dog Garage and coveted car collection. DIY Network's one-hour special features a one-on-one with the late night host as he waxes poetic about a car near and dear to his heart: his winning collection of Duesenbergs. Jay Leno gives DIY the extraordinary stories behind his masterpieces, while world-renowned Duesenberg restorer Randy Ema gives the inside scoop on how to transform a 70-year-old car into a modern miracle. Following the debut of the Celebrity Rides, the franchise continues with the fall 2007 premiere of Celebrity Rides: Burt Builds a Bandit, and will put the spotlight on the complete restoration of a Trans Am that Burt Reynolds made famous in the 30 year-old cult classic film, Smokey and the Bandit. DIY Network's current automotive block on Friday nights (10 p.m.-11 p.m. ET) covers everything from simple repairs, advance rebuilding techniques to trends in customizing your ride.
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TVBR Radar 2007
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Television News you won't read any where else. TVBR--First, Accurate, and Independently Owned.
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MG needed fresh TV blood
to avoid red ink
Media General (MG) brought in 75.4M in May, up 2.8% over the results from the same month in 2006. However, the upswing was due to the addition of four new NBC affiliates last summer. Take them out of the equation and the ink was red. A triple low in Tampa was also cited as a particular problem as the Tampa Tribune, WFLA-TV and website TBO.com all experienced difficulties.
TVBR observation: Bottom line and many in TV take this as a lesson of old line not moving to keep up with the new times and we are not talking newspaper St. Pete Times. First, the Tampa Tribune has seen an upper management swinging door more than a slamming screen door in a Florida hurricane. The Trib is so thin that even the birds in a cage don't want it. It boils down to Content and Presentation at the Trib as that is their first of many issues. Their website is not consumer friendly. WFLA is an NBC affiliate and at the mercy of the networks programming but that is only one half of MG's problem as their content, as all TV owners have to take a lesson from Nexstar, - Cut your Retran deals and get your network and local programming HD content on all providers. TVBR note: Technology is waiting for no one and for TV operators to get the most from their programming this fall they will have to cut their deals and get HD programming to all suppliers. Consumers are buying the HD screens and the outside HD antenna just does not cut it. Consumers are searching more for HD content and if you snooze you will lose.
06/18/07 TVBR #118
Legislators Wonder
What makes XM/Sirius so Special
The proponents of the XM/Sirius merger found an expert to support the case for allowing the transaction to go through in the person of Thomas Hazlett, who was once the Chief Economist for the FCC. The National Association of Broadcasters, unsurprisingly, takes exception.
RBR observation: Broadcasters have been forced to "restrain this new service" to make sure that the two licensees did not encroach on broadcast territory in violation of their charters. That means keeping them away from local content. The satellite licenses were designed to have a national scope, while leaving local content to companies that have local staffing who will actually be around in a time of emergency, and who have some knowledge of local events, tastes, weather, traffic, etc. On top of that, the satcasters required somebody to police them as they played fast and loose with terrestrial repeater siting and receiver specs. We still find it difficult to believe that this proposed merger is going to make it anywhere near the finish line.
06/18/07 RBR #118
Primo properties on the block
There may have already been a lot of television station inventory up for sale, but the nine stations that Rupert Murdoch has decided to divest from the News Corporation portfolio are definitely primo and will attract lots of attention from private equity groups seeking a strong base for a new group - or possibly expansion of an existing one. Based on 2006 revenue estimates from BIAfn, the nine stations, all carrying the Fox network, raked in 347.8 million. We know that the Fox O&O group generally has strong broadcast cash flow margins, so if we figure 45% margins, that's 156.5 million in BCF. If we assume the bidding starts around 12-13 times, that's a total price tag that might push past two billion.
TVBR observation: News Corporation is not selling stations anywhere that it has duopolies, which explains why market #19, Orlando, is not in the divestiture group. We would not be surprised, though, to see the company entertain bids separately for its two smallest Fox O&Os in Austin, TX (#52) and Gainesville, FL (#162). This might not be an optimal time, though, to try and sell the MyNetworkTV standalone in Baltimore (#24). The other nine MyNet O&Os are all in duops with Fox O&Os. As for the nine primo properties that Allen & Co. is now shopping, we will be surprised if they are not sold as a group - a Very Impressive Group. Take a look at the shopping list compiled by TVBR.
06/15/07 TVBR #117
Musicians bite the hand that promotes them
There's a new coalition on the block - the musicFIRST Coalition, and it's looking for cash. Comprised of performing and recording musicians, it wants to receive compensation whenever one of their performances is played over the air. AFTRA agrees, NAB does not.
RBR observation: What nobody seems to be talking about is that the music industry was caught completely flat-footed by the internet revolution and is still struggling to come up with a business model to get back its former profitability. In its search quest, it's trying to muscle cash out any source it can. But in the final analysis, NAB is correct. Musicians can't rail against broadcasters for forcing them into prolonged obscurity by not airing their work on the one hand, and then rail against broadcasters for failure to pay up when they are on the air. Radio and music have long had a symbiotic relationship which is beneficial, even vital, to both. Radio needs the content, and musicians need the exposure. That's a fair trade.
06/15/07 RBR #117
Suit filed over Ion buyout
As we had predicted, disgruntled preferred shareholders have sued over the terms they've been offered in the reorganization of Ion Media Networks. Citadel Investment Group has already bought out most common shareholders under its deal with NBC Universal to take Ion private, but all along there has been more resistance from the preferred holders.
06/15/07 TVBR #117
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Hard finding that key person
to fill the important position at your organization? Media HeadHunters is the place that key media firms use to get results. See Media HeadHunters and get results with service--Period.
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contact Cathy Carnegie
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