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Volume 22, Issue 244, Jim Carnegie, Editor & Publisher

Thursday Morning December 15th, 2005

TV News®

Bidding begins for VNU
Nielsen parent VNU confirms that it's gotten multiple buyout inquiries, which its board is considering. It's not saying anything about the bidders, or whether they're being allowed to look at the company's non-public financial details. Indeed, analysts failed to get any hint of any more detail out of VNU CEO Rob van den Bergh in a conference call. A report in the Financial Times said the VNU board was seeking at least 32 euros per share for the company, but he refused to comment on that or any other story that's been published about the bidding. VNU closed yesterday on the Amsterdam Exchange at 28.65 euros (approximately 34.40 US). The main reason for yesterday's conference call was to announce that VNU's 2005 revenues would come in slightly below previous guidance - - up 5-6%, rather than approximately 6% - - but that earnings per share would still be in the 0.85-0.90 euro range. van den Bergh, who's already announced plans to resign, following the collapse of a merger with IMS Health (11/18/05 TVBR #227), insisted those were "very solid results." Nielsen Media Research and the rest of the Media Measurement & Information (MMI) group is clearly the best performer at VNU, with organic revenue growth of 11% expected for 2005. The story is quite different for the Marketing Information (MI) sector, a major piece of which is ACNielsen, where revenues are expected to be up 3.5-4%. Even worse, though, is the Business Information unit, where only a 2% revenue gain is now expected, mostly from its trade show business in the US. The unit's magazines have been hurt by the advertising slump, particularly its European computer titles, although van den Bergh singled out The Hollywood Reporter and Adweek in the US and Intermediair in the Netherlands as trade magazines which are performing well.

TVBR observation: Despite the collapse of the IMS merger, which was vehemently opposed by VNU's largest shareholders, we were surprised to hear van den Bergh mention that VNU is still going ahead to develop "strategic opportunities" with IMS. Does that add fuel to our previous report (12/12/05 TVBR #241) that IMS may be a bidder for VNU?

Today is D-day for ratings proposals
Dozens of companies sought copies of Clear Channel's RFP for a new, passive radio ratings system (6/14/05 RBR #116), but today is the day we find out how many actually submit proposals. Only four companies are known to have working devices for passive electronic audience measurement: The Media Monitor from Italy-based Eurisko and the MediaWatch from GfK/Telecontrol in Switzerland, both of which use sound matching (comparing listening recorded by the device to samples from recorded broadcasts), US-based Arbitron's Portable People Meter (PPM) and the most recent entry from UK-based Ipsos, both of which require stations to use inaudible encoding. Of those four, only the PPM is in commercial use anywhere yet. Arbitron thinks it has a leg up on the competition and its President for PPM, Pierre Bouvard, used a press conference yesterday to reiterate that his company is "absolutely delighted" by the Clear Channel RFP. "If radio wants to go, and wants to go now, we're ready - - and anybody else has got a long, long way to go," he said, noting that the RFP requires such things as a demonstration in a US market, which PPM has already done, and MRC accreditation, which PPM is working on now. While PPM has been pitching radio groups for a "radio first" rollout, beginning in April 2006, Bourvard claims any other passive measurement system couldn't be up and running until 2010. "If all you've got is a gizmo, you've still got a long way to go," he said of the possibility that some garage inventor may come up with a device to enter into Clear Channel's competition.While pitching itself as the frontrunner in the radio ratings competition that Clear Channel is running in coordination with several other radio companies, Arbitron is hoping for a win on the TV side as well. Since Nielsen announced last month that it had expanded its due diligence team to scrutinize a potential PPM joint venture (11/15/05 TVBR #224), Arbitron officials say lots of Nielsen folks have been at Arbitron's data center in Maryland pouring over data from the Houston PPM test. Nielsen has promised a decision on a joint venture go or no-go in Q1 2006.

Is CATV's trail of tiers a raw deal?
That's what a columnist for the Charlotte Observer believes. Andrew Shain thinks that the only consumers who stand to benefit from the proposal from a number of cable MSOs to offer a special tier of family-friendly channels are those who are hopelessly befuddled by channel blocking technology already offered and, he claims, not at all difficult to use. First, he argues that objectionable material may find its way into the living room regardless, since it hasn't been eradicated, in the opinion of many, from "steamy afternoon soap operas and bathroom-humor sit-coms," not to mention "playful" animals on The Discovery Channel. That's just his set-up argument, however. His main concern is that cable is offering the tiers to avoid offering the fee savings which might be required in an a la carte menu system. Indeed, the fact that a family tier would be confined to a cable system's pricier digital service would likely mean that subscribers would actually pay even more than they are already - - he estimates as much as 170 dollars more per year in Charlotte.

TVBR observation: Shain also writes, "Niche channels can charge subscribers and advertisers a little extra to survive." Is that how it works? The less viewers you have, the higher your rates? Shain continues, "And if they don't get enough eyeballs and revenue, they deserve to fold." The provision of a national platform is precisely what gives niche services the critical mass they need to make a go of it. This is the kind of stunningly naive grasp of advertising economics that would leads an industry insider to discount the entire opinion as frivolous and ill-informed. Unfortunately, the civilians who read the Charlotte Observer will not have the same knowledge to draw on when they read it.

Distillers dispirited by tobacco promo
How often does an often-embattled retail industry get to bash one that's even more embattled? Such a situation has now arisen. "The distilled spirits industry is outraged by R.J. Reynolds Tobacco Company's unauthorized, irresponsible campaign condoning excessive, illegal drinking," said Distilled Spirits Council President Peter Cressy (pictured). "The spirits brands highlighted in the R.J. Reynolds marketing promotion were included without the knowledge, consent or participation of any spirits company. The spirits industry does not condone any marketing materials that glorify drunkenness and illegal, underage consumption." At issue is a promotion in which Reynolds used this line: "Camel - - It's your birthday. Drinks on us." Allegedly used without the permission or even the knowledge of manufactures were products from Bacardi, Brown-Forman, Diageo and Pernod Ricard. "These same materials would be a clear violation under the Distilled Spirits Council's own advertising and marketing Code if there had been liquor company involvement, which there was not. This Reynolds promotion blemishes the reputation of the distillers' longstanding commitment to responsibility and we join the Attorneys General in urging Reynolds to immediately halt this promotion." The quotes are from a letter defending distillers and detailing their lack of involvement in the campaign which apparently used recipe coasters as a venue. The letter was addressed to three state attorney generals: Eliot Spitzer of New York, J. Joseph Curran Jr. of Maryland and Bill Lockyer of California, and cc'd to G. Steven Rowe of Maine and Mark Shartleff of Utah.

Decent debut for Live Nation
Live Nation, the coming spin-out of Clear Channel Entertainment, did well in its first day of NYSE trading on a "when issued" basis. The stock opened at 11.50, which proved to be its high for the day, and closed at 11.05. That pricing was to the higher end of the 8-12 range mentioned this week by Bear Stearns analyst Victor Miller (12/14/05 TVBR #243) and alleviated fears that the market might mis-price the concert business being spun out from Clear Channel Communications into an independent company. There were reportedly some vultures ready to pounce if they saw the shares available for a few dollars less.

Adbiz©

DIRECTV and Twentieth Television expand ad sales to include DIRECTV Para Todos
DIRECTV and Twentieth Television announced the expansion of their current ad sales agreement to include DIRECTV Para Todos, DIRECTV's Spanish- and English-language programming platform, beginning 1/1. Twentieth Television will be responsible for overseeing all general market and direct response ad sales for select channels available on DIRECTV Para Todos. DIRECTV's Para Todos provides access to more than 55 Spanish-language and 220 English-language channels. Currently, DIRECTV Para Todos is available in more than 850,000 homes. With this agreement, Twentieth now manages all advertising sales for DIRECTV. Said Bob Cesa, EVP/Advertising, Twentieth Television: "It has been a pleasure to work with and to represent DIRECTV to the advertising community. We are proud that our success has resulted in growing the relationship to include DIRECTV Para Todos. The Latino community is the fastest growing market in the country with immense buying power. We are now uniquely positioned to empower advertisers with a direct link to this highly attractive demographic." Most recently, the companies announced the formation of the DIRECTV Advertising Development Partner Program, with Chrysler Group as one of its clients. The initiative provides clients with interactive advertising and research vehicle that spans across multiple DIRECTV platforms, including interactive set-top receivers, DVRs and the DIRECTV DVR Client Server. Be sure to catch RBR/TVBR's interview with Bob Cesa in our February RBR/TVBR Solutions Magazine.

What increases are being paid for the 2006 radio upfront?
Now that the 2006 network radio upfront is getting finished but is still hot, we thought we'd get a few opinions on how it's going - - up, down, flat, and why. What increases, if any, are being paid? (continued from Tuesday).

Says Matt Feinberg, SVP/National Radio, Zenith Media Services:
"We're doing a lot of planning for next year. We're doing some scatter buying right now for first quarter. Clearly, the market is just not up there to justify any kind of significant increases. Who knows what will happen, but we're planning minimal increases at best. Our bigger concern is really the kind of strategies that the networks can offer us and how they can work with the interactive efforts we are doing, which are pretty significant-both with radio and TV."

Said Rich Russo, JL Media's SVP/Director of Broadcast Services:
"There are no increases. The only increases we'll see are the increased frequency of the sales reps continually begging to get on buys. Flat to backwards. They should call it 'Wal-Mart Radio' - - they're rolling back prices!"

Media Markets & MoneyTM

Braves and Turner South net on the auction block
Ted Turner's former Atlanta empire is slowly being dismantled by Time Warner. Turner Broadcasting confirmed to the Atlanta Journal-Constitution that it is interested in selling the Atlanta Braves baseball team and the Turner South regional cable network - - if it can get a good price. Turner Sr. VP Shirley Powell told the newspaper that there have been no formal discussions yet with any potential buyer, but that Allen & Co. has been engaged to shop the properties. Turner Broadcasting, which is a division of Time Warner, previously shopped the Braves and Turner South in 2003, but took them off the market after selling the Atlanta Hawks NBA team and the NHL Thrashers.

Washington Beat

NC politician cleared in FEC complaint
George Moretz has finally put one more hangover from the 2004 election season in the rear view mirror. He has been facing a complaint before the Federal Elections Commission brought by Thomas J. Strini to the effect that he had made an excessive contribution to the presidential re-election campaign of George W. Bush via express advocacy in the form of a television advertisement. The ad allegedly criticized Democratic presidential nominee John Kerry - - a charge that is not particularly in dispute. Whether it in any way helped George W. Bush, however, was disputed. The ad was run during a Republican primary contesting the US House of Representatives seat for North Carolina's 10th District. Moretz, a state representative, lost the party nod to the eventual winner, Patrick McHenry. His ad's purpose was to establish him as an ally of the President in the war against terror. Since no votes were at stake, Moretz claimed that the charge was frivolous. The FEC agreed.

Ratings & Research

ABC shows again tops for TiVo-ing
"Desperate Housewives" was again the most watched show for TiVo owners in the most recent week, followed by another ABC show, "Grey's Anatomy" - - then two CBS entries, "CSI" and "Survivor." But NBC had a good week, claiming the next three slots with "The Apprentice," "My Name is Earl" and "Las Vegas."
| Tivo Top 25 |

RBR - Radio News

Mel is gone, so is Infinity
Mel Karmazin's imprint is fast fading away at Viacom as it prepares to split into New Viacom and CBS Corporation the end of this month. The company name most associated with Karmazin, Infinity, is history. The radio group at the new CBS Corp. is being re-branded as CBS Radio and it's also emphasizing a new slogan: "Broadcast ... HD ... Streaming ... On-Demand." The jettisoning of the Infinity moniker was jointly announced by CBS Corp. CEO-to-be Les Moonves and Joel Hollander, whose new title is Chairman and CEO of CBS Radio. Hidden well down in the announcement was word of another name change: Viacom Outdoor will become CBS Outdoor. An obvious move, since the billboard company will be part of CBS, not New Viacom. "This is a proud moment for all of us who love the CBS name, and who know the storied history of CBS Radio. It is one of the most revered brands in broadcasting, with a history that predates the television era. CBS Radio was there at the infancy of radio, playing a formative role in shaping and building this dynamic industry, and we're incredibly proud to bring it back," said Moonves. "In reclaiming the CBS Radio name, our division will embrace that strong legacy of quality and leadership while at the same time look towards the future, leveraging our great brands, talent and market-leading positions as we forge new ground in distribution, content and technology. It's only natural that we'd want to use the CBS Radio name to re-brand our radio stations, which will continue to innovate and redefine our industry much as they have throughout the last 75 years," said Hollander.

RBR observation: It was Karmazin who built Infinity from an owner of three stations to a major radio group which he took public on Wall Street, took private, then took public again before leveraging it through a series of mergers into Westinghouse, CBS and finally Viacom. But while the name may have been near and dear to him, it didn't mean much to the general public as a brand. CBS does, so it makes sense for Moonves to emphasize the CBS brand across the TV network, local TV stations, local radio stations, the outdoor division and related operations - - CBS Digital Media Group and CBS Consumer Products. Maybe Mel would like to buy the name back and launch the Infinity Channel on Sirius.

Stock Talk

A mixed day
Lower oil prices gave most stocks a boost, but downgrades of Apple Computer by two brokerage firms pushed the tech-dominated Nasdaq composite lower. The dow Industrials rose 60 points, or 0.6%, to 10,884.

Most TV stocks were slightly higher. Saga led the way, up2.6%, and Sinclair rose 2%.

Stocks

**Here's how stocks fared on Wednesday**
Company	Symbol	Close		Change	Company	Symbol	Close		Change
Acme	ACME		3.61	-0.17	Media General	MEG		50.87	+0.22
Belo	BLC		21.69	-0.19	Meredith	MDP		51.85	+0.25
Clear Channel	CCU		33.04	+0.29	News Corp.	NWS		16.85	-0.07
Disney	DIS		25.00	-0.13	Nexstar	NXST		4.78	+0.12
Emmis	EMMS		20.09	+0.08	NY Times	NYT		27.61	-0.03
Entravision	EVC		7.25	+0.10	Paxson	PAX		0.97	+0.04
Fisher	FSCI		45.23	+0.10	Saga Commun.	SGA		11.77	+0.30
Gannett	GCI		61.38	+0.13	SBS	SBSA		5.26	+0.05
Gen. Electric	GE		35.77	+0.30	Scripps	SSP		46.92	-0.31
Granite	GBTVK		0.22	-0.03	Sinclair	SBGI		9.83	+0.19
Gray	GTN		10.28	+0.30	Time Warner	TWX		17.89	+0.10
Gray, C1. A	GTNa		9.76	+0.16	Tribune	TRB		31.13	-0.07
Hearst-Argyle	HTV		24.05	-0.21	Univision	UVN		30.88	+0.38
Jeff-Pilot	JP		56.20	+0.62	Viacom, Cl. A	VIA		34.64	-0.14
Journal Comm.	JRN		14.03	+0.08	Viacom, Cl. B	VIAb		34.58	-0.22
Liberty Corp	LC		47.08	-0.09	Wash. Post	WPO		759.70	+1.67
LIN TV	TVL		12.92	-0.06	Young	YBTVA		2.65	+0.14
McGraw-Hill	MHP		52.76	-0.40	-	-	-	-	-

Bounceback

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TV Media Moves

Nelson helms
Mullally talker
Emmy Award-winning producer Corin Nelson has been named Executive Producer of "The Megan Mullally Show," the new daytime talk show coming from NBC Universal Domestic Television Distribution. Nelson won her five Emmys as show-runner of "The Rosie O'Donnell Show."

PR realignment
at NBC Uni
NBC Universal Television Group Publicity has promoted Curt King, Deborah Thomas and Joe Schlosser to Sr. VP. Also, Kahlil Olmstead has been promoted to Director, Talent Relations. But that's not all. There are three new hires as well: Lesley Corwin, Chandler Spaulding and Kristy Chan.

Below the Fold

Ad Biz
DIRECTV expands
With Twentieth Television...

Media Markets & Money
Braves and Turner South net
On the auction block...

Washington Beat
NC politician cleared
In FEC complaint...

Ratings & Research
ABC shows tops for TiVo-ing
"Desperate Housewives" was again the most watched ...

TVBR Radar 2005

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

DirecTV fined 5.3M
Federal Trade Commission's largest fine ever for violation of the "do not call" law for telemarketing, with DirecTV paying 5.3 million in civil penalties. The settlement filed in a California federal court names DirecTV and five firms that did telemarketing on its behalf as defendants, along with six principals of those telemarketing firms. In a separate case announced before the FTC fine, DirecTV has agreed to pay five million bucks to customers in 22 states to settle allegations of deceptive marketing practices.
12/14/05 TVBR #243

Clear Channel's spin-out
of CC Entertainment
Renamed to "Live Nation" "LYV" (the ticker symbol) NYSE. Bear Stearns analyst Victor Miller is expecting LYV to trade around 10 bucks - - he gives a range of 8-12. He says the knee-jerk reaction is likely to be to drive Clear Channel's stock price down a buck or so, but he calculates that the real impact should be much less. TVBR observation: Miller has been critical of CCU management in the past - - in fact, he urged an outright sale of CC Entertainment as a better course - - so he's not one to look at the company through rose-colored glasses. As we indicated, his 11-step analysis is too complicated to review in-depth here, so you'll have to contact him if you want to see for yourself.
12/14/05 TVBR #243

MSOs set to unveil family tiers
Reacting to pressure from Capitol Hill, National Cable and Telecommunications Association (NCTA) CEO Kyle McSlarrow told a Senate hearing Monday that several cable MSOs are about to announce family-friendly channel tiers - - but he insisted no new law, such as a la carte, is needed. Likewise, Jack Valenti warned against government intrusion. TVBR observation: Monday's hearing was overwhelmingly focused on cable TV, but Chairman Sen. Ted Stevens (R-AK) did bring up one subject near and dear to the hearts of terrestrial radio and TV broadcasters when he asked about pending bills to dramatically increase indecency fines.
12/13/05 TVBR #242

Publisher observation
On VNU and the attention
Reality time, what is facing the Nielsen side of VNU is going to be difficult with forward motion of 'LPM' and making a decision during the first quarter next year on the Arbitron 'PPM' front as it takes commitment from the top of the company at VNU with technology and money. Not to say the toll it takes on the people inside of Nielsen. Remember this is research not a durable good like a TV station. Research is a fickle business especially when you are the leader as the business executives (the customer) loves you then hates you at any given time. Publishing side - To some extent the same can be said here but to a lesser degree as the money or the prize is Nielsen. Plus, whoever wins the potential battle better know something about the businesses of the titles that are being tossed around for headline attention like Billboard, Hollywood Reporter, Media Week. They look pretty on paper but you better know what the hell you are doing because this is not the old days with those brands. There is tremendous competition on the computer screen(s) today and to print those trade publications mentioned are not getting any healthier as trade publishing print consistently faces difficult time as I personally know from experience as the inevitable decision was faced and made in 2002 by us at RBR & TVBR. Remember expenses will go up for print trade publications just as US Postage prices are rising next year. Under any circumstances VNU bosses have to confront the inevitable and get on the record of attack now on this press coming from the WSJ instead of 'No comment.' TVBR was the first to forecast this show down now the problem is here as the other shoe has hit the floor.
12/12/05 TVBR #241

Four caught in public file dragnet
The FCC will be defraying the national debt to the tune of 40K if the latest quartet of notices of apparent liability on the public file rap stick. All four 10K fine proposals had a children's programming element. TVBR observation: Anyone else notice that if you have one file omission - - worth 10K - - you can have two or even three more at no extra charge. Publisher note: Look for TVBR's Special Report on what you need to know about your Public File and not cost your station a 10K fine. Written for TVBR by FCC leading lawyer Gregg Skall, it will be emailed in a PDF printable format as our Christmas present to you. Only daily members of TVBR will receive this special report. Have it or it could cost you 10K in a fine. To say the least, this report alone is worth the price of a 1 year gold subscription.
12/12/05 TVBR #241

TV getting the snot kicked out of it
At Gannett November TV station revenues were down 3.4% local revenues were up 4.3%, while national fell 14.5% for the month. Then - NY Times declines to give 2006 guidance as the advertising outlook is so uncertain that it can't provide Wall Street with earnings guidance on 2006.
TVBR observation: All in TV get prepared because your day to day life as you once knew it is gone. This year we have heard the Ditto excuses as these mirrored radio of '04 and 05. Look in the mirror and point the finger of blame at yourselves. Now how are you going to improve a new year? First key is Content and less clutter. Just look at radio as this side of the business cluttered themselves to obesity now they are trying every diet possible to lose this clutter weight and it has cost them business - Learn from their mistakes.
12/09/05 TVBR #240

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