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Volume 22, Issue 216, Jim Carnegie, Editor & Publisher

Thursday Morning November 3rd, 2005

TV News®

Sook tight-lipped about retransmission deal; Ready to sell 5 stations
If you penciled in time yesterday to listen to Nexstar's quarterly conference call to find out more about the company's retransmission consent deal with Cox Communications (10/21/05 TVBR #207), you were no doubt disappointed. When one analyst asked about the financial impact of the deal on Q4 and 2006, about the only thing that he learned was that the economic benefit for most of the Nexstar/Mission stations really begins in 2006 and runs through 2010. "There is a very minimal economic benefit that will accrue to the company in the fourth quarter of this year as the result of the Cox agreement," said Nexstar CEO Perry Sook. Nexstar hasn't yet given Wall Street any financial guidance for 2006, so there was none forthcoming on how much benefit to expect from the Cox deal in '06. Sook had previously spoken of selling off some non-strategic stations from the Nexstar portfolio, but yesterday he got a bit more specific. He told analysts that the company is shopping five stations in four markets. He didn't name them, but did say that WHAG-TV (Ch. 25, NBC) Hagerstown, MD (part of the Washington, DC market) is not one of the five. If all of those divestitures do take place, Sook expects the total sale price to exceed 50 million bucks.

CBS eying cable buy?
It may not have been idle speculation when Viacom Co-President/COO and CBS Corp. CEO-to-be Les Moonves spoke this week of getting CBS into cable TV after the Viacom split (11/2/05 TVBR #215). Bloomberg News reports that Moonves is in talks to buy College Sports Television Networks (CSTN) for as much as a half billion bucks to operate in conjunction with CBS Sports. CSTN airs more than 35 collegiate sports - - ranging from basketball and hockey to water polo and fencing. The privately owned company was launched two years ago by Brian Bedol and Stephen Greenberg with financial backing from Coca-Cola, George Soros private investment group, Allen & Co, JPMorgan Chase and Constellation Ventures.

TVBR observation: Certainly fits the idea of a brand extension. CBS Sports has already been successful in the Internet arena by acquiring former partner SportsLine. CSTN competes with Disney's ESPNU, but there are so many college teams in so many sports that there should be no shortage of content for everyone to go after. And until cable reaches the overload point for sports junkies - - and who knows where that might be - - everyone is going to be looking for ways to claim a piece of that cable pie.

Sinclair beats its peers, boosts dividend
Revenues were down in Q3 at Sinclair Broadcast Group, but only by 1.7% to 149 million as the company came close to replacing all of the revenues from last year's political advertising. Much of the credit goes to the company's affiliates of the surging ABC network, where revenues were up 7.4%, while its other network groups were down, except UPN, which was flat. While national billings matched the TVB's industry averages with a decline of 7.2%, local was up 2.5%, outperforming most other TV groups. Sluggishness in the auto sector remains the big problem. At this point, COO Steve Marks says Q4 looks a lot like Q3. Excluding political, Sinclair expects Q4 billings to be up 1.7-2.7%. Joining the trend for broadcast companies to become strong dividend payers, Sinclair announced that its board of directors has increased the company's dividend payout by a third. The new dividend is 40 cents per share per year (10 cents quarterly), which worked out to a yield of 4.8% when it was announced yesterday.

Chicago, Milwaukee on the license-challenge MAP
Watchdog Media Access Project, acting as counsel for local public interest groups, has launched a challenge to license renewal efforts by television stations in Chicago and Milwaukee. A veritable Who's Who of television group owners is named in a complaint based on their alleged failure to adequately cover local and state elections. In Chicago, broadcasters are taken to task for devoting less than 1% of newscasts to non-federal elections in the four weeks leading up to Election Day. During that same time frame, Milwaukee stations were charged with devoting less than 1% of newscast time to state elections, about 2% to ballot issues and about 1% to other local elections. MAP quotes the Commission's own language of 1984, when it declined to specify limits. MAP says the Commission stressed that "the basic responsibility to contribute to the overall discussion of issues confronting the community is a non-delegable duty for which each licensee will be held individually accountable." The charges are based on data culled by newscast monitoring by the Center for Media and Public Affairs. Results for the five highest rated stations in Chicago showed 7.8% of newscasts going to election coverage, with 79% of the 7.8% devoted to presidential or US senate campaigns and only 8% of the 7.8% devoted to all other Illinois races combined. In Milwaukee, 5.2% of newscast time went to election coverage, with 77% on presidential/senatorial races and 4% for local office races and ballot issues. | Caught in the watchdog dragnet |

Issue ad too hot for Hot-97
According to the New York Daily News, Emmis Communications's WQHT-FM Hot-97 in New York refused an ad promoting a rally critical of President George W. Bush. A group of groups called The World Can't Wait, Drive Out the Bush Regime wanted to run a :60-second spot promoting Big Apple a rally and march. According to NYDN, shortened versions of the spot have run on other stations, and Hot-97 was said to have initially approved the spot. However, corporate staff decided to err on the side of caution and squelch the ad. The text of the ad does appear to be quite provocative, mentioning torture and leaving people to die in New Orleans.

TVBR observation: This is a tough call. If you turn down one issue ad, and then accept another, you are really opening yourself up to charges of placing a corporate filter on the First Amendment. A zero-issue ad policy is tough to pull off because it is a relatively easy matter to sneak a message into what on the surface appears to be a standard promotional spot. If a legitimate group has the cash, and is not presenting creative that is actionably indecent or otherwise illegal, as a steward of the public airwaves, accountable to the public, it is probably best to err on the side of airing whatever comes your way. Like indecency, the line between what is and is not too controversial is utterly impossible to define.

DHHS takes to the airwaves

The Department of Health and Human Services has gotten into some trouble over the last couple of years for its advertising and PR practices, and against that backdrop it's getting set to enter the arena again. This time, however, it should be smooth sailing. It is putting together an advertising campaign to combat underage drinking, targeting the parents of children aged 11-15, 11M of which are said to be alcohol users. The multi-media effort will utilize TV, radio, the Internet, newpapers and magazines.

TVBR observation: This is a goal most Americans can get behind, so this time there should be no political problems for DHHS. Just so long the script doesn't include lines like, "This is Karen Ryan reporting that this kid is blotto."

Conference Calls 2005

Nexstar revenues down 9.9%
Continued soft auto advertising and the lack of political ad spending were cited as Nexstar Broadcasting Group reported a 9.9% decline in Q3 revenues to 54 million bucks. Total ad revenues were down 11.4% to 53.7 million, with non-political advertising down 1.8% to 53.5 million. Political advertising totaled a mere 200K, compared to 6.1 million a year ago. Broadcast cash flow decreased 25.4% to 16.7 million. For Q4, Nexstar is telling Wall Street to expect non-political ad revenues to be up 0.5-2.3%, which would result in total revenues being down 16.3-17.7%. That also includes the impact of Hurricane Rita on KBTV-TV (Ch. 4, NBC) Beaumont, TX, which Sook said was out of commercial operation for the first two weeks of Q4.

Radio and TV both gain at Univision
Their English-language peers may be struggling with a tough advertising market, but Univision reported Q3 gains for both its TV and radio operations. TV revenues rose 4.6% to 343.3 million and operating income gained 3.7% to 129.4 million. Radio revenues rose 7.8% to 96.9 million and operating income increased 18.5% to 41.6 million. Add in Univision's music and Internet businesses and total revenues were up 4.2% in Q3 to 497.5 million and operating income gained 7.5% to 180.5 million. Noting that upfront sales were up in the mid-20s range, company officials told analysts to expect growth to continue.

Strong quarter for Time Warner
Once beleaguered, Time Warner is again becoming a Wall Street darling. Not only is it finding that AOL may have some real value in a sale or joint venture, but Q3 financial results for the media giant came in above expectations and the company announced a plan to more than double its stock buyback program. Earnings were 897 million for the quarter, or 19 cents a share, up eight cents from a year ago and two cents better than analysts had been expecting. Total revenues rose 6% to 10.5 billion. A major contributor was the Networks Group, which includes the WB, although the big movers in Q3 were on the cable side. Revenues for the Network Group rose 10% to 2.4 billion. Content revenues climbed 38%, driven by HBO's broadcast syndication sales of Sex and the City and higher international sales of HBO original programming. Subscription revenues rose 5%, resulting mainly from higher rates at Turner and HBO and, to a lesser extent, an increase in subscribers at Turner. Advertising revenues were up 8%, led by 12% growth at the Turner networks. Operating income for the unit rose 22% to 699 million.

Adbiz©

Pool, Russo, Crawford comment big bucks
spent on Stern replacement promotions
By now, most know of Infinity buying 24 full-page ads as the sole sponsor in this week's edition of Ad Age to promote Stern replacements, including Adam Carolla, David Lee Roth, Penn Jillette and Rover. The cost for that alone was reportedly around 800,000 dollars. What was the reason for that kind of spend? Was it to increase brand awareness for the radio buyers?
| Agencies tell it straight up |

Dairy Queen taps RPMC for The Apprentice promo
RPMC announced it is playing a key role in Dairy Queen's "Now Hiring! Become DQ's Blizzard Apprentice" promotion. Developed to support DQ's starring role this month in an episode of NBC's "The Apprentice," the promotion developed around the Blizzard Flavor Treat marks the first time a company appearing on the show has created a national promo to find a real-life apprentice. The contest also marks the third time this year that RPMC has been tapped by DQ to manage travel and promotional services for the brand's marketing of some of its signature offerings. RPMC also played pivotal supporting roles in Dairy Queen online campaigns for the "Dairy Queen/Alienware" sweepstakes and "DQ Arctic Rush Challenge" instant-win game.

Media Business Report

Knight Ridder under pressure to sell
A major shareholder of Knight Ridder is threatening to lead an effort to replace the board of directors at Knight Ridder unless the current directors agree to put the company up for sale. Private Capital Management LP, which owns about 19% of KR, said in a letter filed with the SEC that a sale is the only viable option after seeing the newspaper company's stock price collapse 25% over the last year or so and, in Private Capital's view, the likelihood that newspapers will continue to lose advertising to the Internet. KR management offered no response to the investment group's demand.

MBR observation: Who would the buyer be? KR is the second largest newspaper group, behind Gannett, and would be a huge acquisition for any of the other large groups to try to pull off - - not to mention the antitrust problems. And, of course, they're all facing the same problems that have weighed on KR's stock price. Private equity funds might be interested, but we doubt that they'd want to pay a premium price for a big player in an unattractive sector.

Washington Beat

Another parcel of Paxson stations wrist-slapped
Another group of Paxson O&O television stations has been commended by the FCC for generally serving the public interest, and the stations were thus rewarded with license renewals. At the same time, they were admonished for allowing a period of time to go by during which they were not providing program guide publishers with the age-group targets applicable to its children's educational programming schedule. Even though most publishers do not pass this information along to their readers, the FCC requires they are provided with it in hopes that they will. The stations caught this time include WVPX-TV Cleveland-Akron OH (Akron OH, Ch. 23), WUPX-TV Lexington KY (Morehead City KY, Ch. 67), WPXK-TV Knoxville TN (Jellico TN, Ch. 54), WPXA-TV Atlanta GA (Rome GA, Ch. 14), WIPX-TV Indianapolis IN (Bloomington IN, Ch. 63), WPXD-TV Detroit MI (Ann Arbor MI, Ch. 31), WNPX-TV Nashville TN (Cookeville TN, Ch. 28) and WPXH-TV Birmingham AL (Gadsden AL, Ch. 44).

TVBR observation: Paxson did a very smart thing. It fixed the problem itself, and also told on itself. The FCC places a very high value on candor. If the FCC believes you are honest and aboveboard, especially to the level of turning yourself in for what might otherwise remain an undiscovered infraction, you will have earned the benefit of the doubt. Give the FCC reason to doubt your candor, however, and watch out. If the Commission thinks you lied about one thing, they'll suspect there are other lies out there waiting to be discovered. Wise move, Paxson.

Programming

Brown out as Cooper gets 10 pm CNN slot
Well, one part of the recent rumors proved true. Anderson Cooper (pictured) is moving to the 10:00 pm to midnight slot on CNN after wowing his bosses with his performance covering Hurricane Katrina and other major stories in recent months. But the other part isn't true. He's not swapping time slots with Aaron Brown - - Brown is gone. Instead, Wolf Blitzer will get another hour of "The Situation Room" at 7:00 pm after a one-hour dinner break. The changes will be effective next Monday. "Anderson is one of the most distinctive voices anywhere on television. He has broken through the clutter with his candor, his humanity and his emotional connection to the most pressing stories of our time. As a result, he has gained a strong following among viewers that we hope to build on," said CNN/US President Jon Klein.

NBC Uni goes sleuthing
NBC Universal Cable Entertainment announced plans to launch Sleuth, a 24-hour entertainment cable channel dedicated to the crime, mystery and suspense genre. At launch the network will have more than five million subscribers through distribution deals with Time Warner Cable, its first affiliate. Also, NBC Uni says sleuth will be the first network to offer a digital triple pack service, which features a standard definition digital channel (SD), hi-definition simulcast channel (HD), and a video-on-demand (VOD) channel offered as a digital bundle. The SD digital channel will be available January 1, 2006, with the VOD and HD offerings available later in 2006. "We're thrilled to offer one core channel with three digital products with Sleuth," said Jeff Gaspin, President, NBC Universal Cable Entertainment. "Crime, mystery and suspense are the all time most popular television genres and Sleuth will be a network devoted exclusively to these genres. The programming on Sleuth, tapped from NBC Universal's vast library, will appeal to a broad audience who will be able to enjoy everything from classic films and nostalgic TV shows to current documentaries and series," he said. Sleuth will feature crime and mystery classics from NBC Universal's extensive library of feature films, classic television shows, reality series and documentaries. Programming includes popular and cult television series like "Miami Vice," "The A-Team," and "Knight Rider." Crime, mystery and suspense films like "Scarface," "The Jackal," "Casino," "Sneakers" and "Mercury Rising" will be in the SD and HD lineups, with at least 20 hours of content from the channels offered on demand at any given time to consumers.

ABC/ESPN and Univision
score FIFA World Cup rights
As soccer becomes more and more a mainstream sport in the US, TV rights payments are going up. ABC/ESPN has retained the US English FIFA World Cup rights and Univision the Spanish rights in the latest round of negotiations for a reported 425 million bucks. The Spanish rights are actually worth more - - reportedly 325 million of the package, with ABC/ESPN paying the other 100 million. In both cases, that's more than double the price of the previous round. The new deals cover rights to the 2010 and 2014 FIFA World Cup soccer tournaments, in addition to a large portfolio of FIFA soccer events, including the FIFA Women's World Cups 2007 and 2011 and FIFA Confederations Cups 2009 and 2013, as well as 22 additional tournaments, for 325 million. The FIFA World Cup, which will take place in South Africa in 2010 and in a location in South America yet to be named in 2014, is viewed by billions of viewers across the globe every four years. Univision first televised the FIFA World Cup in 1978, and has televised every tournament since then.

Ratings & Research

ABC shows 1, 2 with TiVo users
With TiVo's weekly viewership report one day different from Nielsen's, that one day made a difference for the most recent week, since TiVo measured a new episode of ABC's "Desperate Housewives," not a repeat, which claimed the #1 spot. "Grey's Anatomy," immediately following, was #2.
| Tivo Top 25 |

Stock Talk

Corporate profits boost stocks
Strong Q3 earnings news, including media giant Time Warner, boosted stock prices on Wednesday. The Dow Industrials rose 66 points, or 0.6%, to 10,473.

TV stocks joined in the advance. Wall Street liked Sinclair's dividend increase and Q3 numbers, pushing its stock price up 5.8%. Spanish Broadcasting rose 5.1%. Emmis, Entravision, Gray, Media General and Saga were all up 3% or more.

Stocks

**Here's how stocks fared on Wednesday**
Company	Symbol	Close		Change	Company	Symbol	Close		Change
Acme	ACME		3.90	-0.01	Media General	MEG		55.45	+1.71
Belo	BLC		22.67	+0.60	Meredith	MDP		49.80	+0.10
Clear Channel	CCU		30.15	+0.25	News Corp.	NWS		15.25	+0.16
Disney	DIS		24.82	+0.16	Nexstar	NXST		4.36	-0.09
Emmis	EMMS		20.21	+0.64	NY Times	NYT		28.03	+0.80
Entravision	EVC		8.30	+0.28	Paxson	PAX		0.43	unch
Fisher	FSCI		48.75	+0.50	Saga Commun.	SGA		12.55	+0.49
Gannett	GCI		64.98	+1.62	SBS	SBSA		6.44	+0.31
Gen. Electric	GE		33.81	+0.21	Scripps	SSP		46.57	+0.53
Granite	GBTVK		0.27	unch	Sinclair	SBGI		8.89	+0.49
Gray	GTN		9.50	+0.28	Time Warner	TWX		17.90	+0.33
Gray, C1. A	GTNa		9.23	+0.23	Tribune	TRB		32.35	+0.88
Hearst-Argyle	HTV		24.19	+0.14	Univision	UVN		27.46	+0.79
Jeff-Pilot	JP		54.33	-0.13	Viacom, Cl. A	VIA		31.89	+0.28
Journal Comm.	JRN		14.08	+0.08	Viacom, Cl. B	VIAb		31.73	+0.18
Liberty Corp	LC		46.70	unch	Wash. Post	WPO		752.00	+1.95
LIN TV	TVL		12.95	+0.15	Young	YBTVA		2.72	-0.26
McGraw-Hill	MHP		50.01	+1.01	-	-	-	-	-

Bounceback

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TV Media Moves

New Schurz
heading Schurz
Todd Schurz has been named President and COO of Schurz Communications, succeeding his uncle Franklin in heading operations of the radio/TV/newspaper company. Franklin Schurz will now be Chairman and CEO. Todd had been President and GM of WSBT-TV South Bend, IN.

A VP for PPM
Arbitron announced that John Snyder has been promoted to the newly created position of Vice President, Portable People Meter Sales, making him the primary strategist for PPM sales, focusing on radio groups and agency holding companies. Snyder had been VP, National Group Services, handling the Clear Channel and Citadel accounts.

Below the Fold

Ad Biz
Agency bosses comment on Infinity / Stern replacement promotions. Was it to increase brand awareness for the radio buyers? No, estimated Rich Russo

Media Business Report
Knight Ridder under pressure to sell
A major shareholder is threatening to lead effort to replace the board of directors. MBR observation: Who would the buyer be for the second largest newspaper group,

Washington Beat
Another parcel of Paxson stations wrist-slapped. Commended by the FCC for generally serving the public interest

Programming
NBC Uni plans to launch Sleuth, a 24-hour entertainment cable channel dedicated to the crime, mystery and suspense

Brown out as Cooper gets 10 pm CNN slot, well, one part of the recent rumors proved true.

Ratings & Research
ABC shows 1, 2 with TiVo users
TiVo's weekly viewership report one day different from Nielsen's, that one day made a difference

Marketing

GM and Ford sales down 23% in October
As Americans continue to pull back the reins on uncertainty, based on everything from job losses to natural disasters, GM and Ford are really feeling the pinch. They reported 23% declines in October U.S. sales. Industry-wide, sales slumped to their slowest pace in seven years. Chrysler said U.S. sales rose 1% in October, giving it 19 consecutive months of year-over-year gains. Toyota and Honda posted October gains of 5% and 4%, respectively. Adding insult to injury, Moody's cut GM's debt rating deeper into junk territory status on Tuesday, citing sliding market share and uncertainty about fixing its problems.

TVBR Radar 2005

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

Moonves:
Stern loss is "slight concern"
future CBS CEO Les Moonves on the impact of losing 5% of Infinity's revenues, but Moonves insisted there was only "slight concern" about Stern's departure. Noting that Infinity recently announced 10 different replacements for Stern on various stations, Moonves said some will work and some won't. But he also noted that Stern's contract had gotten so expensive that Infinity wasn't making much profit on his show anyway. TVBR observation: Stop and Please listen to Moonves audio clip above (slight concern) and you will not believe your radio ears. If you have any vested interested in this media business called Radio and or TV you will hear on the record a new soon to be CEO of CBS Corp reduce the radio medium to a numbers game, about cutting costs and only the bottom line margins. Of course the entire audio quote is mostly surrounding Howard Stern but finally it has been said on the record that radio is just a numbers game and margins are the game in radio. Moonves said in 2004 at the TVB conference that he loves to use Infinity radio as his marketing tool to promo his CBS TV network lineup. Now it makes sense that no divesting in the future is in play as radio is just margins and for promotion. Stern no impact on leaving because the costs of paying Stern have been reduced and Moonves states som! e formats will work and some won't as it is called toss the crap against the wall and see what sticks. Buy out Ad Age every week but somebody did a great snow sales job on Moonves. Radio is just about the margins? Not programming, content, branding, marketing, people - Just Margins - swell just swell.
11/02/05 TVBR #215

NBC Nightly News
now streaming on MSNBC.com
Beginning 11/7, free of charge, online at MSNBC.com as this is the next logical step for 'Nightly' and NBC News. TVBR observation: And probably in all network evening news in general. This is worth saying again - Technology waits for no one. Not diary, not LPM, but the consumer is in charge. It would not surprise us to report next that 'Nightly News' will not be on your local affiliate but only on MSNBC and streaming etc. Makes sense to us just like it made sense for TVBR to stop printing a weekly news magazine in 2002 and go electronic and delivering to your desk top to blackberry.
11/02/05 TVBR #215

Comcast buy of
Susquehanna Communications
has multiple price tags
It surprised no one with the total transaction value is 775 million. At the same time, a new partnership headed by Cumulus Media agreed to buy Susquehanna Radio for 1.2 billion. TVBR observation: Take a lesson from Comcast and Cumulus - Plan your work now for 2006 because -Time waits for no one and if you stand still long enough you are bound to catch a bullet.
11/01/05 TVBR #214

VNU sale or get some Street Smarts
The unpopular move by VNU management has motivated the big investors to demand change at the company, so pressure is on - either buy back stock, sell off assets or sell the entire company to the highest bidder. TVBR observation: In either an asset sale or breakup scenario, it appears the piece of VNU most likely to be in play. Big investors don't see the division as a major growth vehicle and would be happy to see it sold off. Publisher observation: Big investors do not see it because they only see the color of money and do not plan a business model that brings synergy to a gorilla size companies. It takes street smarts to fix and improve valuable brands not a calculator
10/27/05 TVBR #211

Barrett to Iger:
We're in this together
Says Disney's ABC was pretty smart to sign up first with Apple to provide programming for its new video iPods but he has a bone to pick and feels the affiliates should be participants in that business. Barrett's beef - Affiliates are the ones who are airing the shows in 75% of the country that ABC does not own [the local stations] and doing the marketing and promotion.
Publisher observation: Barrett has a point but the word is business and ABC and iPod are doing business to move ABC content in a faster line on how the consumer if they want it get it and will to pay for it. IT will be in demand from now until IT freezes over so get used to IT. Financial details view.
10/28/05 TVBR #212

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