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Volume 23, Issue 248, Jim Carnegie, Editor & Publisher

Friday Morning December 22nd, 2006

Merry Christmas to you and yours!
TVBR returns Wednesday, December 27.
The RBR/TVBR offices will be closed Monday and Tuesday, December 25-26.

TV News ®

Bidders getting serious about Tribune
The initial bids from private equity firms may have been underwhelming, but interest in Tribune Company is heating up - at least to the point where it appears there are at least four potential bidders getting serious about whether to make formal offers. According to the Chicago Tribune, flagship of the company, the deadline for bids has been set as January 17th. The newspaper reported that management at its parent company has given presentations to two consortia of private equity firms - one composed of Madison Dearborn Partners, Apollo Management and Providence Equity Partners and another composed of Texas Pacific Group, Thomas H. Lee Partners, Carlyle Group and Bain Capital. Also getting presentations were representatives of billionaires Ron Burkle and Eli Broad, who have teamed up to bid for the company, and Gannett Company. Adding another wrinkle to the process, the report said the Chandler family, which owns a 20% stake in Tribune Co., had representatives at some of the presentations and appeared to be working with one or both of the private equity bidding teams.

TVBR observation: Initial bids were said to have been only around 32 bucks a share, which was about where Tribune's stock has been trading for some time. But then Burkle and Broad entered the picture to stir up a little excitement. The latest presentations have been designed to open the books to the bidders and convince them that Tribune's assets are worth more than the value Wall Street has been ascribing to them. It appears all of the bidders are planning on major spin-offs, particularly since there is little hope of retaining the temporary FCC waivers that Tribune has for its newspaper-broadcast combinations. That means that the sell-off of TV stations begun by CEO Dennis FitzSimons, but limited until now to non-core markets, will likely jump into high gear once a buyer is chosen for the entire company. It is not often that you see stations for sale in New York, LA and Chicago, so 2007 will likely be a hot year for TV station trading.

Sinclair wants its bonds back
Sinclair Broadcast Group is borrowing more money from its bankers to buy back hundreds of millions of its public bonds. The company says its wholly owned subsidiary, Sinclair Television Group, will redeem in full its existing 8.75% senior subordinated notes due 2011, totaling 307.4 million bucks face value. In accordance with the terms of the notes, holders will receive 104.375% of face value, plus all accumulated an unpaid interest. To finance the bond buyback, Sinclair Television Group has increased its bank term loan that matures in 2012 by 225 million. The remainder will come from its revolver and cash on hand.

Hispanic growth continues to lead English-language
The fastest-growing segment of the US population is Hispanic, and advertising revenue is still trying to catch up with it. Although 2nd and 3rd generation Hispanics will tend to migrate to English-language programming, eventually cooling the Hispanic advertising trend, there is still enough of an influx to keep its trend ahead of the curve. Magazine Marketing y Medios commissioned and published Kagan Research figures which peg Hispanic television growth from 2007-2010 at an average of 6.5% per year, and radio growth at 5.3% per year. Hispanic radio in 2007 is expected to jump 6%, double or even triple the 2%-3% predictions for mainstream radio. The trend toward an English language orientation was also downplayed somewhat, since many use it during the day for work but use Spanish at home.

TVBR observation: It will be interesting to see if the sudden flood of inventory coming from Clear Channel will generate a significant flow of radio and television stations into the Hispanic column.

An early start for 2008
The perhaps not so great whooshing sound is coming from Draft Obama, an organization which is notable for two reasons. First, it hopes to have a brief existence - if Sen. Barack Obama (D-IL) jumps into the presidential fray, the organization's reason for existing will have happily disappeared. Second, in an effort to nudge Obama into the race, it is running the first ads of the 2008 campaign. They found a pro bono producer in The Jackson Group's Bud Jackson, according to MSNBC, and an article in the Manchester NH Union Leader helped fuel a spate of donations which will go for airtime in New Hampshire and Washington DC. According to Draft Obama's Kris Schultz, the ad has an extremely limited target audience. It's aimed at Obama and only Obama. Historically, it follows a similar effort prior to the 2004 presidential derby aimed at former Gen. Wesley Clark.

TVBR observation: The limited scope of this flight and the seemingly limited resources behind it are not going to inspire Wall Street analysts to reassess the prospects of broadcasters in view of a coming windfall of political cash in 2007. But perhaps it does signal that there may be more cash available than usual. And it may well be profitable to keep tabs on developing campaign organizations and their media teams, and let them know how well you serve the same people they will need to reach to ask for votes.

TV welcomes telcos with open arms
Others? Not so much. It's not that some aren't looking forward to competition for cable and satellites for MVPD service. And broadcasters will be glad to get leverage as it they dicker with cable over retrans and multicast carriage issues. But cable, local governments and Democrats on Capitol Hill may take issue with the FCC's Wednesday telco action. The National Association of Broadcasters wholeheartedly endorsed the greasing of the telco wheels. EVP Dennis Wharton said, "NAB salutes the FCC for taking decisive action to increase much needed competition to cable monopolies. With today's action, the Commission has delivered a holiday treat for cable customers who will now have a choice and the ability to avoid rate hikes that run two to four times the annual rate of inflation." This echoed a recent Michigan Association of Broadcasters endorsing similar action by its state legislature. Putting the broadcast perspective in fuller light, MAB President Karole White said the Michigan bill "...ensures that Michigan consumers will have complete access on new delivery systems to their local news, entertainment programming, weather and emergency information they've come to expect from our broadcast community. The bill also guarantees that providers cannot tamper with the quality of the broadcast signals, which is especially important for consumers who've made significant investments in high definition television systems." On the other side: NCTA's Kyle McSlarrow is arguing that the concept of a level playing field in a highly competitive landscape has been ignored. Public interest watchdogs are greatly concerned that lack of strong buildout requirements will restrict telco service to affluent neighborhoods, with the lower rent districts coming late or not at all. Either faction (or both) could bring the courts into play. The two Democrats in the House with the most to say about the issue, John Dingell (D-MI) and Ed Markey (D-MA) are almost a sure bet to bring their renewed power to bear on the issue, bringing Capitol Hill into play. As we said before, this one isn't over.

Home Theater and Video Products
dominate Pre-CES 2007 buzz
The rise of technology blogs such as Engadget, Gizmodo and TechCrunch are driving healthy annual growth in pre-show buzz surrounding the Consumer Electronics Show (CES). According to Nielsen BuzzMetrics, 2007 CES-related consumer discussion on Usenet, blogs and boards has increased nearly 20% in the six-week period ending 12/12, compared with the same period last year.
| Read More... |

Ad Business Report TM

Ford Edge launches with 500 million impressions
Ford is enlisting a Grammy-nominated hip hop artist, the star of Dreamgirls, an up and coming Canadian songwriter, full-size vehicle models, extensive TV ads and the company's biggest-ever digital marketing push to launch the all-new 2007 Ford Edge crossover, with a goal of making 500 million consumer impressions over the holiday weekend. The Ford Edge, now arriving in showrooms, features five-passenger seating, a powerful V-6 engine and features like the panoramic "Vista-Roof," all of which will be featured in the advertising. The campaign will crossover into every part of consumers' lives through Internet partnerships, TV ads and targeted print tie-ins, beginning 12/24.
| See all the details |

Wendy's trying dynamic
ad insertion this weekend
The latest in dynamic ad insertion demonstrated: The NY Times reports animated raccoons will provide instant feedback in ads for Wendy's that will be shown at the start of commercial breaks. If the score is 0-0, an ad might start with a Wendy's raccoon standing in front of an overturned trash can, saying, "I may be nocturnal, but this game is putting me to sleep." If there is a touchdown just before a commercial break, another raccoon might say: "Touchdown. These fans are as rabid as we are." With three sections of the commercial inserted on the fly, viewers could see up to 11 versions of the ad. All will include a v/o saying, "Why eat junk at night when you can go to Wendy's?" The spots air on Fox Sports this weekend.

Washington Media Business Report TM

FEC spanks 501 organization
Non-profit Freedom Inc. claimed tax-exempt status from the IRS under Section 501(c)(4). However, the Federal Election Commission determined that the group's raison d'etre was "campaign activity." The primary beneficiary of this was Emanual Cleaver (D-MO), who bested Republican Jeanne Patterson with 55% of the vote in a campaign for Missouri's Fifth Congressional District seat, left vacant by a retiring Democratic incumbent. Freedom Inc. accepted contributions in excess of the 1K limit, spent over 45K on radio and television advertising, and another 20K on "get-out-the-vote activities." In all, it pulled in over 90K in funding that either exceeded the maximum individual donation or came illegally from corporations or unions. It'll have to pay a 45K civil penalty. Cleaver was re-elected this year with 65% of the vote against a different challenger.

Cable Business Report TM

Yes, YES is suing Time Warner Cable
Yankees Entertainment Sports Network (YES) has been doing some accounting and claims that Time Warner Cable has been underpaying it for nearly two years now. Time Warner Cable doesn't agree, so YES has sued the cable company in a New York court, seeking more than 1.5 million in back fees. As the name implies, the YES regional sports network carries the Yankees, along with New Jersey Nets basketball and other sports-related programming.

Internet Media Business Report TM

WWE signs mobile deals
World Wrestling Entertainment has signed new content agreements with communications company Orange, Britain's third-largest network operator; Heylife, a mobile, Internet and TV content producer and distributor based in Portugal; and German broadcaster Tele5, which currently airs weekly installments of WWE's television program, SmackDown.

Entertainment Media Business Report TM

CBS reshuffles Monday lineup
David Spade returns to sitcom work as CBS sets February 5th for the premiere of a new comedy series, "Rules of Engagement," as part of a reshuffling of its Monday comedy block. Spade plays the single guy on the prowl as the show looks at different phases of a male/female relationship from three different perspectives. Also featured are Oliver Hudson and Bianca Kajlich as the newly-engaged couple, and Patrick Warburton and Megyn Price as a long-married (in TV terms) couple. "Rules of Engagement" is produced by Happy Madison Productions and CBS Paramount Network Television in association with Sony Pictures Television. Creator Tom Hertz, Jack Giarraputo and Doug Robinson are executive producers. At this point the series is only set for a seven-week run and will turn over its time slot April 9th as "The King of Queens" returns with original episodes to complete its 9th and final season. Also on Mondays, the freshman comedy "The Class" will run its course in early March, with "The New Adventures of Old Christine" taking the time slot March 12th after going on hiatus following its January 29th broadcast. Got that? If not, CBS has spelled it all out for you.
| Read More... |

Ratings & Research

Judy and Raymond duke it out
For the most recent week, "Judge Judy" edged out "Everybody Loves Raymond" for the #2 spot in syndicated TV, based on ratings issued by the Syndicated Network Television Association (SNTA), based on data from Nielsen Media Research. Well out in front, as usual, was "Wheel of Fortune."
| View the Chart |

TVBR Stats

Product placement Top 10
Product placement by advertisers really took off this year. Nielsen Product Placement, a relatively new part of the media tracking company, found thousands and thousand of instances this year of products being placed inside programs to outsmart viewers who try to fast-forward through commercials. Just to make this Top 10 list a TV show had to have over 1,500 product placements.

Click for larger version

TVBR observation: Reality TV is obviously the easiest place to include product placements. The placements can be as blatant as outright sponsorships without upsetting the audience. But we note that one scripted series did make the list, "The King of Queens," known for regular appearances of such things as a Bud Lite can and the Nike swoosh. With the show wrapping up after the current 9th season, the writers might want to add "product placement specialist" to their resumes as they look for new work.

Stock Talk

Factories still matter to Wall Street
This may be the information age, but when the Philadelphia Federal Reserve Bank reported yesterday that its regional manufacturing index had posted its weakest showing since 2003 stock traders took note. The Dow Industrials fell 43 points, or 0.3%, to 12,421 and other major indices were down as well.

More TV stocks were down than up. ACME was the worst performer, plunging into penny stock territory with a 6.5% drop, but there was no news about the company. LIN had the best day, up 3.4%.

Stocks

**Here's how stocks fared on Thursday**
Company	Symbol	Close		Change	Company	Symbol	Close		Change
Acme	ACME		4.89	-0.34	LIN TV	TVL		9.92	+0.33
Belo	BLC		18.05	-0.03	McGraw-Hill	MHP		67.97	-0.32
CBS CI. B	CBS		31.67	-0.07	Media General	MEG		38.78	-0.22
CBS CI. A	CBSa		31.68	-0.07	Meredith	MDP		56.25	-0.13
Clear Channel	CCU		35.55	-0.01	News Corp.	NWS		22.52	-0.04
Disney	DIS		34.54	-0.07	Nexstar	NXST		4.69	+0.04
Emmis	EMMS		8.09	unch	NY Times	NYT		24.02	+0.11
Entravision	EVC		8.15	+0.01	Ion Media	ION		0.59	-0.03
Fisher	FSCI		43.08	+0.27	Saga Commun.	SGA		9.58	+0.24
Gannett	GCI		60.07	-0.44	SBS	SBSA		4.30	unch
Gen. Electric	GE		37.77	-0.10	Scripps	SSP		49.68	-0.19
Granite	GBTVK		0.10	-0.01	Sinclair	SBGI		10.90	+0.04
Gray	GTN		6.87	+0.02	Time Warner	TWX		21.96	unch
Gray, C1. A	GTNa		7.87	unch	Tribune	TRB		31.54	+0.18
Hearst-Argyle	HTV		25.68	-0.17	Univision	UVN		35.35	+0.01
Journal Comm.	JRN		12.49	+0.11	Wash. Post	WPO		755.00	-9.00
Lincoln Natl.	LNC		65.20	-0.40	Young	YBTVA		2.74	+0.68

Bounceback

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TV Media Moves

Fox Sports
promotes Derse
Fox Sports International (FSI) announced the promotion of Edward Derse to VP/Interactive Media. He assumes responsibility for Fox Sports International's interactive and emerging media platforms, including Internet, broadband, IPTV and wireless. He'll also oversee interactive platform integration across FSI's television network production, marketing and ad sales operations. He was most recently Director of Interactive Media for FSI, as well as director of emerging networks for Fox Sports Interactive Media.

Below the Fold

Ad Business Report
Ford Edge launches with
500 million impressions by enlisting a Grammy-nominated hip hop artist...

Cable Business Report
Yes, YES is suing
Time Warner Cable
Yankees Entertainment Sports Network doing some accounting and someone has been naughty this year...

Entertainment Media
Business Report
CBS reshuffles Monday lineup
Sets February 5th for the premiere of a new comedy series...

Internet Media Business Report
Skype founders to offer
Broadband TV service with the code name The Venice Project...

TVBR Stats
Product placement Top 10
Trying to out smart viewers Nielsen found thousands of instances of products being placed inside programs...

Stations for Sale

South Georgia
AM-FM-LPTV Combo
Includes 25kw FM
Zoph Potts @ (252) 940-1680
zophsnowden@earthlink.net

New York City
2 LPTVs for Sale
Price Reduced-both for $9 mil
Washington DC - $5 mil
Philadelphia - $2.5 mil
Atlantic City - $1 mil
GeorgeWKimble@aol.com
Kozacko Media Services
520-299-4869

Market your Stations For Sale
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More News Headlines

Skype founders to offer broadband TV service
The Financial Times reports the founders of Skype are close to launching a broadband television service promising viewers, content owners and advertisers "the best of the internet with the best of TV". Janus Friis and Niklas Zennstrom, who sold their online telephony business to Ebay for 2.6 billion last year, have invested part of the proceeds in developing the service, which has the code name The Venice Project. It will offer "near high-definition", programs supported by advertising, with tools for users to personalize their channels or discuss programs with others, the paper said. Friis said peer-to-peer technology used by the service, which exploits networks of personal computers rather than central servers, would make it possible to serve "tens of millions of users" while overcoming content owners' security concerns. Programs would not require digital rights management protection, said Fredrik de Wahl, the project's chief executive, because "the bits and bytes being collected on your computer are fragments of a stream". The service is expected to launch next year and is being tested by about 6,000 individuals, Friis told the paper. At present, it has attracted few big-name channels. The company would not disclose who, but one person close to Warner Music confirmed it was using the service to create channels for some of its artists. The venture aims to provide outlets for traditional broadcasters and independent producers. Unlike YouTube, it will offer conventionally programmed channels. The Venice Project will earn revenue from taking a cut of the advertising on its channels, with the amount varying according to whether the content owner sells the advertising or The Venice Project's own sales team.

TVBR Radar 2006

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

Indecency on trial: Fox's case
Fox said the FCC has provided no reasoned explanation for pulling a 180 degree turn on its enforcement of fleeting unplanned expletives. The two sides have said these things before, but this time they were in front of a trio of judges.

FCC's case
Explained that the offending remarks from Cher and Nicole Richie delivered on an awards program would not be deemed indecent if the same exact clips were broadcast on a news programming.

TVBR observation: We aren't on the judge's panel, but from what we saw, this will not be decided on points. We don't even need to go into the laughable "mosaic" that has made the rules "clear" to all of us,... Without considering all that, Fox in our observation scored a clean knockout. Pacifica says repeated and deliberate. These incidents were fleeting and unplanned. If we were the judges, the case is closed. Now let's see what the real judges have to say. (Complete details and analysis in)
12/21/06 TVBR #247

Tribune LBO report denied
The lead independent director at Tribune Company insists that top management is not aligned with any group bidding for the company. That follows a report in Tribune's own LA Times that an LBO bid is in the works (12/19/06 TVBR #245), with CEO Dennis FitzSimons and other top executives teaming up with three private equity firms to bid for the company. Not so says William A. Osborn, who is leading the committee of independent directors as they analyze bids for Tribune and its various businesses.

TVBR observation: Maybe the original rumor was totally bogus. If not, then FitzSimons has gotten himself into a jam. The way out, though, would be to quit his CEO job - which is almost certainly going to disappear in a few months anyway - and then submit a bid to buy the company. But this is just thinking out loud on our part...
12/20/06 TVBR #246

Whiting's star rises;
VNU sells Euromags
CEO David Calhoun continues to remake VNU, the company has announced a deal to sell its European business-to-business publications, mostly computer titles, and confirmed plans to cut its payroll by 10%. Also, Nielsen Media Research CEO Susan Whiting was moved up to a corporate level post and is becoming an even more important player at VNU, which RBR/TVBR had also predicted several times in recent months. Her title at Nielsen Media Research has been boosted from President to Chairman and she is now also Executive Vice President of VNU, reporting directly to Calhoun and providing counsel to VNU's Supervisory Board, which is made up of directors appointed by the new private equity owners. Also, the payroll reduction was the official corporate announcement of what RBR/TVBR reported last week (12/12/06 TVBR #240). In saying it plans to make permanent cost redu! ctions of 10% over the course of 2007, VNU said the focus will be on simplifying its business processes and organizations structure, with most cuts from "non-client-facing activities.

TVBR observation: Why had we expected Whiting to move up? Back when the private equity firms were placing their bid to buy out the public shareholders of VNU, our sources said she was the executive who impressed the would-be buyers with her savvy observations on what worked at VNU and what needed to be fixed. Now she is going to have a key role in restructuring the entire company, under Calhoun, who is the heavy-hitter brought in from GE to captain the ship. Look for events to move fast in 2007. As costs are cut and businesses restructured, we expect VNU to reincorporate in the US from its current home in The Netherlands, take a new name built on the Nielsen brand name and then file for an IPO. Further detail see
12/19/06 TVBR #245

Website Director
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