Welcome to TVBR's Daily Epaper
Volume 24, Issue 214, Jim Carnegie, Editor & Publisher
Thursday Morning November 1st, 2007

TV News ®

Potential WGA Strike: What might happen to programming options
It will be interesting if the strike does happen, as it will almost be like a test lab of what viewers are going to do. Will they go to the web and look at different sites? Will it be a boon for syndication? We may well find out. Jason Kanefsky, MPG SVP/National Broadcast, pictured, is a bit pessimistic about the strike, since the expected resolution yesterday did not materialize. People will, however, still watch TV. "I really think syndication could get a bit of an increase on this," Steve Lanzano, MPG COO, says. "A lot of the networks, to maintain themselves, could go to a lot of live sports. Which is why clients who may not have a direct male demo, have been going more and more into live sports." These are live ratings points, very little C3. Valentine's Day, Easter holidays--for a lot of retail advertisers these are very important holidays and they need the ratings points. So retailers may look at alternative programming that's going to give them live ratings points. The premium will be driven way up. Another factor will be overseas companies-a lot of programming emanates from Europe, BBC is a biggie. A lot of networks will see what they can do with these companies to get something new and original on the air.

TVBR observation: Word has it the Daytime soaps are poised to hire non-union "scab" writers. As Carat's Shari Anne Brill pointed out to us yesterday (10/31/07 TVBR #213), the Teamsters (set crews, etc.) may stage a solidarity strike with the WGA-scab writers increase the chances of that happening ten-fold. Kanefsky says if there is a unity strike, "You might as well turn the key off. Cable becomes primetime. And it really becomes about acquisitions."
| Key Strike Analysis Here |

Analyzing Sinclair Broadcast (Real Estate & Signs) Group
Sinclair Broadcast Group has been on an acquisition binge lately, paying 9.1 million bucks for a commercial warehouse in Baltimore, 17.1 million for a commercial office building in Baltimore, 5.2 million for developmental land in Chapel Hill, NC, and 3.7 million for developmental land in Annapolis, MD. Before that, it bought Triangle Sign & Service, a commercial sign company based in Baltimore, for 16 million. That has some Wall Street analysts concerned. In the company's quarterly conference call, Bear Stearns analyst Victor Miller asked why Sinclair has been focusing so much on non-television businesses? CFO David Amy noted that Sinclair had been doing more than just TV for 7-8 years now. And yes, the company has been bidding on potential duopoly properties, but has been outbid, so it is investing where it sees profitable opportunities.

CEO David Smith noted that Sinclair has four options for creating value for shareholders: investing in TV; investing elsewhere; paying dividends; and buying back stock. In fact, Sinclair yesterday announced that it is increasing its annual dividend by 10 cents per share to 70 cents. CFO Amy noted that was a 5.75% yield on the previous day's closing price of 12.09, one of the highest yields in broadcasting.

TVBR observation: The proof is in the pudding - so let's check out that pudding. In Q3, the "other operating divisions' revenues" at Sinclair showed 12.5 million, up dramatically from 3.3 million a year ago. Of course, operating expenses for those businesses also shot up. Simple math, subtracting expenses from revenues, shows "other" with a positive 1.3 million in Q3 this year, vs. a negative 22K a year ago. Not bad pudding.


FCC gets an earful on localism
NAB's Marcellus Alexander pointed out at yesterday's FCC Localism Forum that broadcasters cater to their local audience or they go out of business. Eleven other witnesses, including Capitol Broadcasting's Jim Goodmon agreed, at best, in part, or not at all. Goodman asked that no changes in ownership rules be made until the new realities of digital broadcasting are fully understood. He said in the new paradigm, his two Raleigh television stations could well be the equivalent of eight, and that one FM station could equal three. Why would anyone loosen the rules until that situation is sorted out? He said the thing to do is finish the regulatory framework necessary to get the digital switch done. Also, he openly acknowledged the withering criticism leveled at broadcasters and did something you rarely hear management do -- he volunteered for more paperwork. He said he'd welcome the opportunity to provide a quarterly report detailing exactly what his stations do for their local community, and asked only that a proceeding be initiated to define just what public interest means in real terms.
| Read More |

TVBR observation: This is the second time in two weeks that we have heard a prominent regional broadcast owner refuse to take a bullet for the big consolidated broadcast companies that seem to be the cause of most of the heat being directed at the business. Goodmon followed Russ Withers, who declined to defend his competitor Clear Channel under questioning from Byron Dorgan (D-ND) at a 10/14/07 Senate Commerce Committee hearing. To underscore, Goodmon said no to deregulation and yes to public interest standards and reporting requirements. Extraordinary.
| Testimony summaries here |

No announcement on Lincoln sale
One analyst yesterday pressed Lincoln Financial Group CEO Dennis Glass for an answer about the status of Lincoln Financial Media - "is this thing for sale, or not?" CFO Fred Crawford, who is handling the strategic review of the radio and TV properties, stepped in to supply this answer: "What I would tell you is that we're very deep into the process and I would expect to be making further comments, updating you more specifically on the outcome of our media project and where we stand, over the course of the coming weeks - perhaps sooner, it depends on how things develop. So, at this point in time I'm not ready to give you a specific update on that, other than to say we're deep into the process." Lincoln Financial Group had issued its Q3 results a day earlier (10/31/07 TVBR #213).

TVBR observation: A non-answer answer if ever we heard one. So, we wait. As reported previously, our sources say Raycom has the inside track to buy the TV group for about 500 million, but that the radio stations will be sold in pieces for a total of about 650 million. The other piece, the sports broadcast operation, is expected to bring about 50 million.


Wall Street Business Report TM
Sinclair beats expectations, boosts dividend
Yes, political advertising was down, but Sinclair Broadcast Group reported that exluding political, Q3 local ad sales were up 2.7% in Q3 and national was down 5.5%. Also, retransmission consent payments helped counteract the decline in political revenues and network comp. All in all, broadcast revenues from continuing operations were down 0.6% to 149.4 million and total revenues for the company rose 4.9% to 176.7 million, which beat both the company's guidance and Street expectations. Analyst Christopher Ensley at Bear Stearns calculated that EBITDA was up 1.2% to 59.5 million, while he had been expecting a decline. With increased profits and a political year on the horizon, Sinclair announced that its directors had increased the company's annual dividend by 10 cents to 70 cents per share, a dividend rate of 5.75% based on the pre-announcement closing price. For the current Q4, Sinclair said TV is pacing down 4.2-5.2% against last year's politically-inflated sales. The Q4 forecast excludes WGGB-TV Springfield, MA, which is being sold for 21.2 million. In fact, that sale is set to close today.


Ad Business Report TM

Potential WGA Strike:
Media agencies comment
With Writers Guild of America writers poised to strike as early as today, we asked more media agencies: If this strike happens, what would it mean to buying, planning, make-goods, etc. How would this affect make-goods and business in general in the first month, second month and beyond? Remember, the current contract between WGA and The Alliance of Motion Picture and Television Producers (AMPTP) expired at midnight 11/1. There was a meeting of all members scheduled at the LA Convention Center last night at 7pm PT to provide updates on negotiations and the guild's options. No deal has been done yet-even with the federal mediators involved since Friday.

Said Rino Scanzoni (pictured above), GroupM Chief Investment Officer and Mediaedge:cia NA Chairman: "There will be no real change in the short term. Most networks have stockpiled scripts. A long strike could have implications for mid-season shows and next years' development. From an advertiser perspective there should be no fallout, so the only financial implications would be reduced revenue if there were ratings shortfalls."

Andy Donchin (pictured right), Carat Americas Director of Broadcast Buying, notes that this has happened before in 1988 and the industry got through it. "We're going to work with the networks-it's very hard to duplicate the reach that television provides us, so in the best case scenario, we'd like to stay within television and we will find out ways to do that." Obviously, as he also pointed out, lower-rated, unscripted make-goods are not the substitute for expensive, scripted fare bought in the upfront. So Carat will address that, too. Agencies don't want to only make sure they are getting their clients the reach and ratings points, but are also getting the same value that they paid for in the upfront.

Steve Lanzano, MPG COO, tells TVBR they are already giving clients some contingency plans, but the bottom line is what the length of the strike is going to be. Most don't think it will last a month, but if it does, indeed, there will be really no big hits. Late Night will take a bit of a hit, but it won't be great. But a lot of the shows have stockpiled their scripts. In December you've got a lot of Holiday shows, repeats, etc. "But when you start to get into Jan-Feb and there's no new programming...already that marketplace is looking at significant premiums in terms of scatter," Lanzano admits. "With ratings plus C3, when you start doing all of these repeats and reality shows, that C3 goes away. Therefore there is going to be so much less inventory in the marketplace and clearly the market is going to get tighter. There are going to be more and more make-goods."

Nielsen spokesperson Jack Loftus tells TVBR the data will be there consistently-strike or not: "We report. They decide. How the data are used in commerce is up to the buyers and sellers. Our job is to provide the best data possible. Both sides have asked us to report the data these ways (commercial ratings, live, DVR delayed, etc.). So we will continue to do so, strike or no."


Media Business Report TM
AOL will allow users
to opt out of targeted ads

AOL announced it will give consumers enhanced notice and info about behaviorally targeted advertising. When fully implemented, a new program will deliver millions of public service banner ads across AOL's O&O and third-party networks. The move is timed to coincide with FTC meetings on consumer-protection issues related to online advertising, which starts today. "Our goal with this program is to engender greater trust for targeted advertising by communicating with consumers in a more visible way, and by providing them more information about their choices," said Curt Viebranz, President of Platform-A. "AOL believes that doing more to explain to users the choices they have over the way their data is used, and helping them exercise those preferences will help them feel more in control." Banner ads providing enhanced notice and choice are already appearing on sites in the TACODA network. When fully implemented by the end of this year, the program will extend to AOL's entire display advertising network by the end of 2007. AOL's display ad network is the largest in the world, with a combined reach of more than 91% of online consumers in the U.S. across more than 7,000 websites. The network includes AOL's owned-and-operated sites as well as Advertising.com's and TACODA's third-party networks.

AOL and Campbell Soup launch food features
AOL and Campbell Soup have launched "Dinner Tonight" and "Play With Your Food" on AOL Food (food.aol.com). "Dinner Tonight" features new daily recipes for successfully preparing great evening meals, the site will provide the ability to store, update and customize favorite recipes. AOL also will incorporate Campbell's comprehensive database of more than 2,000 easy-to-make recipes that are kid-friendly and great for both everyday meals and special occasions. After dinner, it's time for dessert with "Play with Your Food," the newly-created area that will launch next month whose overarching theme is that food equals entertainment. Bringing generations closer together through fun-filled activities in the kitchen, "Play with Your Food" includes articles, quizzes, food trivia, polls and user-generated photo galleries and videos. The Campbell sponsorship will also include the integration of many of Campbell's market-leading brands, including "Prego" pasta sauce, "Pace" Mexican sauce, "Swanson" broth and "Campbell's" condensed soup, throughout AOL.com as part of banner and pre-roll ads.


Washington Business Report TM
Commissioners sound off
FCC Democrats Michael Copps and Jonathan Adelstein are treating the upcoming court-ordered review of media ownership rules with extreme skepticism. Republican Deborah Taylor Tate, on the other hand, seems ready to bring the matter to a conclusion. Robert McDowell (R) is as noncommittal on the topic as he was when he first met with the press just after moving into the 8th Floor. Finally, Kevin Martin (R) had proposals to mitigate problems of competition, localism and diversity, including reinstatement of the minority tax certificate program, leasing of digital side channels and getting more LPFMs up and running.
| Here are highlights of their testimony |

FCC expands franchising guideline
When the FCFC established "rules and guidance" to prohibit local franchise authorities "from unreasonably refusing to award competitive franchises for the provision of cable services," it left incumbent cable companies subject to the old rules. Today, it extended the new provision to incumbents over the objections of the two Democratic commissioners, who objected to the measure in the first place. The thrust of the earlier order was to make sure local governments did not hinder provision of competition, primarily from telco entrants into the MVPD business, by asking for too much money, too much channel capacity for local government/access channels, or other perks for the local community. It now is saying that cable incumbents should also be free from such "unreasonable" local demands.

TVBR observation: The Democrats believe the Commission has gone so far past its jurisdiction that it is legislating rather than regulating in defiance of the very principles of federalism. But if the new rules are going to exist, it is only fair that all competitors, new or old, are playing on a level field. Meanwhile, a national franchise regime has stalled indefinitely in Congress, statewide franchise regimes are being put in place here and there, and telcos are expanding their businesses community by community just the way cable started out for the time being.


Entertainment Business Report TM
NBC goes to the dogs
It may be "turkey day," but it is "dog day" for the Peacock Network as NBC continues its Thanksgiving Day tradition of airing "The National Dog Show Presented by Purina." The event hosted by actor John O'Hurley and dog expert David Frei will air Thursday, November 22nd from noon to 2pm in all time zones, airing immediately following the telecast of NBC's "Macy's Thanksgiving Day Parade." Some 2,000 purebred dogs from some 150 breeds and varieties will be vying for the "Best in Show" title. This is the 6th year that NBC has aired the competition, which has been attracting a total audience of nearly 18 million viewers. "The National Dog Show Presented by Purina" benefits the Veterinary School of the University of Pennsylvania and the Canine Health Foundation. It is hosted each fall by The Kennel Club of Philadelphia, which is sanctioned by the American Kennel Club (AKC). The program is a property of NBC and Carson International, a prominent producer and packager of canine events for live audiences and for television.


Internet Business Report TM
GE/NBC Universal's Peacock Equity invests in 4INFO
Peacock Equity, the joint venture between GE Commercial Finance's Media, Communications & Entertainment business and NBC Universal, announced an investment in mobile media company 4INFO, a major player in SMS/text message content and advertising. 4INFO is the sixth Peacock Equity investment since the 250 million fund was established in April. 4INFO will become NBC Universal's preferred mobile SMS advertising partner, serving targeted advertisements into NBC's existing user-requested SMS traffic.


Ratings & Research
Week 5: Cable falls to 2 of 100
Cable/satellite networks managed to put only two programs in the top 100 for the key 18-49 demo in week five of the new season. That's according to the weekly number crunch by the Television Bureau of Advertising (TVB) of data for both broadcast and subscription TV from Nielsen Media Research. The two entries from the cable side were the usual suspects. ESPN's "Monday Night Football" was #9 and "WWE Entertainment" on USA claimed the #78 spot.
| See the entire list |


Stock Talk
Rate cut, stocks up
The Fed delivered another rate cut and stock traders celebrated. The Dow Industrials rose 138 points, or 1%, to 13,930.

TV stocks went along for the ride. The Radio Index rose 0.577, or 0.5%, to 118.822. Washington Post Co. was up 3.9%, LIN rose 3% and Saga gained 2.2%. Lincoln Financial Group, which is primarily an insurance company, plunged 5.9% after announcing its Q3 results.


Stocks

Here's how stocks fared on Wednesday

Company Symbol Close Change Company Symbol Close Change

Acme

ACME

3.83

unch

Lincoln Natl.

LNC

62.37

-3.89

Belo

BLC

18.50

-0.02

LIN TV

TVL

14.57

+0.43

CBS CI. B CBS

28.70

+0.32

McGraw-Hill

MHP

50.04

-0.19

CBS CI. A CBSa

28.74

+0.32

Media General

MEG

27.98

+0.06

Clear Channel

CCU

37.77

+0.06

Meredith

MDP

62.25

+1.00

Disney

DIS

34.63

+0.34

News Corp.

NWS

22.93

+0.15

Emmis

EMMS

5.19

+0.12

Nexstar

NXST

9.43

-0.05

Entravision

EVC

9.10

+0.14

Ion Media

ION

1.37

unch

Equity Media EMDA 2.61 -0.19

Saga Commun.

SGA

7.30

+0.16

Fisher

FSCI

48.27

-0.34

SBS

SBSA

2.60

+0.02

Gannett

GCI

42.41

+0.54

Scripps

SSP

45.01

+0.70

Gen. Electric

GE

41.16

+0.68

Sinclair

SBGI

12.04

-0.12

Google GOOG

707.00

+12.23

SWMX

SWMX

0.03

unch

Gray

GTN

9.46

+0.10

Time Warner

TWX

18.26

+0.29

Gray, C1. A

GTNa

9.75

unch

Tribune

TRB

30.26

+0.25

Hearst-Argyle

HTV

22.30

-0.46

Wash. Post

WPO

849.00

+32.00

Journal Comm.

JRN

8.91

+0.12

Young

YBTVA

2.34

+0.04


Bounceback

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Below the Fold

Ad Business Report
Potential WGA Strike
Media agencies comment Rino Scanzoni, Andy Donchin, Steve Lanzano give insight to what if...

Media Business Report
AOL will allow
Users to opt out of targeted ads as move is timed to coincide w/ FTC meetings...

Washington Business Report
FCC expands franchising guideline
Extended the new provision to incumbents over the objections of the 2 Dem commissioners...

Ratings & Research
Week 5
Cable falls to 2 of 100 managed to put 2 in the key 18-49 demo...


Stations for Sale

Market your Stations For Sale
in our daily epapers.

Contact
June Barnes
jbarnes@rbr.com


TV Media Moves

Potts stays planted
Tony Potts has signed a new, multi-year contract to remain at "Access Hollywood," the entertainment newsmagazine of NBC Universal Domestic Television Distribution. "Tony Potts is the go-to guy when it comes to celebrity breaking news," said the show's Executive Producer, Rob Silverstein. Potts joined "Access Hollywood" in April 1999, coming to the show after 12 years in television news and sports.

Belo ups four
Belo, which is preparing to split into separate TV and newspaper companies, announced the promotion of four executives in its television operations. Peter Diaz was named Executive VP/Television Operations and Kathy Clements was named Sr. VP/Television Operations, both reporting to President/COO Dunia Shive, who is slated to be CEO of the TV company. Succeeding Clements as President/General Manager of WFAA-TV (Ch. 8, ABC) Dallas-Fort Worth is Mike Devlin, who was previously VP/Station Manager. Succeeding Diaz as President/General Manager of KHOU-TV (Ch. 11, CBS) Houston, is Susan McEldoon, who had been VP/Station Manager.


More News Headlines

IGA Worldwide and NBC Universal pact
IGA Worldwide, a major in-game ad network, and NBC Universal Digital Media have entered into an agreement for the NBCU Digital Media Ad Sales team will now have the opportunity to sell a portion of IGA's in-game inventory, as well as create customized packages for marketing clients on the IGA network. In July, GE/NBC Universal's Peacock Equity Fund participated in IGA's 25 million Series B investment round, for which JMP Securities was the consulting investment bank.


RBR - Radio News

Another assault on radio license rebuffed
Marsha Farley believed that the license renewal for WQXR-FM New York should have been denied, not necessarily for what it did or didn't do, but because of what it's licensee didn't do. A story Farley wanted to see in the New York Times was never written, nor was a version aired on the station, leading her to conclude that the company is not fit to be a licensee. Farley says that one Frederick Lembeck operates a website which has "documentary proof" that NYT is in possession of "evidence of dishonesty in the casino industry" which it is suppressing in order to protect its own advertising revenue. Farley says that Lembeck sent a letter to an NYT exec back in 1997 detailing corruption in the gaming industry, but there has not yet been a story in the New York Times newspaper. The FCC said, "Viewed in its most tolerant light, Petitioner makes the implied suggestion that the gaming industry information should have been broadcast on WQXR-FM." However, there are no specific allegations, and even if there were, the FCC would have very little or no jurisdiction over the matter "in the absence of evidence that the licensee has falsified, distorted or suppressed the news." The First Amendment, and the licensee's judgment on what is newsworthy for its facility, carry the day.

RBR observation: A station goes on trial because of a story a newspaper didn't write? It is probably but a matter of time before a broadcaster accidentally cuts someone off in traffic and is then subject to a Petition to Deny on grounds that their careless driving renders them unsuitable to operate a broadcast license.


TVBR Radar 2007
Television News you won't read any where else. TVBR--First, Accurate, and Independently Owned.

WGA strike:
What it could mean to advertising
If the WGA strike goes through, advertisers, agencies and networks would all be in some sort of turmoil-depending largely on how long the strike lasted. Remember, the strike in 1988 lasted for 154 days. Shari Anne Brill, Carat USA VP/director of programming, wonders if "this economy could handle that." She notes the C3 ratings would be in trouble as well. For comments see TVBR.
10/31/07 TVBR #213

Senators request new
hearing on net neutrality
Byron Dorgan (D-ND) and Olympia Snowe (R-ME) have reached across the aisle in the past to promote the concept of network neutrality. Concerns about cable and telephone companies playing an active gatekeeper role when providing internet access have prompted the duo to call for a new hearing on the topic.

TVBR observation: Put us down for net neutrality. You are reading this right now because you - and TVBR - both have access to a free and open internet. We occasionally are critical of companies that may be carrying us into the homes and businesses of our subscribers. The notion that this relationship between the press and citizens can be disrupted by the carrier runs counter to the founding principles of the United States and absolutely must be protected.
10/30/07 TVBR #212

Publisher Perspective
At the stroke of midnight
Right now, TVBR goes completely electronic. We cease printing SmartMedia mag but the content goes electronic. We have stated numerous times, "Technology Waits for No One." LPM and PPM are rolling, gathering real time data. Therefore, I am not waiting for the New Year's baby to arrive to bring forth our electronic improvements. This is the 2nd time in 25 years I have had to make this hard decision. The first time was 07/08/02 RBR Epaper #1 and my radio friends and colleagues thought I was friggen nuts. When we wish all a Happy New Year 2008, RBR/TVBR will turn 25 years young, our Silver Anniversary. (Reason and looking ahead worth a read see TVBR)
10/29/07 TVBR #211

TVBR News Analysis
The battle lines have been drawn for the latest attempt by the FCC to reform its media ownership limits. Big financial interests want more deregulation, particularly in the biggest markets. Politicians from both parties have staked out the position that all media consolidation is bad. Both sides occasionally pay lip service to considering "the public interest," but, in fact, neither really gives a damn. If they were really concerned about what would be good for the public they would look at the real world and try to fix what is broken - or in the process of breaking. Everyone knows that daily newspapers are in a world of hurt. New Internet challengers are taking big bites out of what used to be their cash cow. There is more and TVBR offers to the FCC 3 dereg ideas that would really serve the public interest.
10/29/07 TVBR #211

Copps presses for News Corp/
Dow Jones hearing
Commissioner Michael Copps is still upset about the pending 5.6 billion bucks acquisition of Dow Jones & Co. by News Corporation and is insisting that the FCC should do something about it. In a letter to Chairman Kevin Martin, Copps calls for the Commission to open an inquiry into whether News Corporation should be allowed to own one of the big four TV networks and two of the nation's largest newspapers.
10/26/07 TVBR #210


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