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Volume 24, Issue 85, Jim Carnegie, Editor & Publisher
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Tuesday Morning May1st, 2007
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TV News ®
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 If the rumor is true, what does Lincoln have to sell?
Should Lincoln Financial Group decide to get out of broadcasting - which, we would note, is still only a rumor - some very attractive properties will be coming on the market. All of the radio properties are in top 40 markets and the TV stations are long-established news leaders in high growth southeastern markets. In reporting the rumor that a broadcast divestiture was under consideration, the Wall Street Journal quoted sources as estimating that the stations could bring about 1.5 billion if put on the market. That looks like a pretty reasonable figure. Detailed data on the broadcast group has become a bit harder to come by since Jefferson-Pilot was acquired by Lincoln early last year. But for 2005, what was then called Jefferson-Pilot Communications had 110.8 million of broadcast cash flow (BCF) on revenues of 246.6 million. At 13 times that BCF, based on other recent major deals, the price tag would be 1.44 billion, but revenues and BCF were likely a bit higher in 2006 due to political advertising. Lincoln reported that its broadcast operation had 188 million in revenues from the April 3rd closing of the acquisition to the end of the year. BIAfn estimates that revenues for the full year were 243.6 million, based on individual station estimates, but that appears to be low given the final figure from the previous year. Here's a look at what might - just might, mind you - be put up for sale.
| View the List |
TVBR observation: The best arguments for Lincoln Financial Group to sell Lincoln Financial Media are that the private market for broadcast stations, both radio and TV, is healthy right now - as demonstrated by the recent sales by CBS Radio, Disney's ABC Radio, NBC, New York Times and Media General in television, and others. Also, while the broadcast division had accounted for 11% of revenues for Jefferson-Pilot (like Lincoln, primarily an insurance company), it accounts for only 4% of revenues for Lincoln Financial Group. There is, however, one very strong argument against a sale. The stations still carry the tax basis from J-P and J-P had owned them for a very long time. Uncle Sam will get a big cut if Lincoln Financial Group decides to cash out of broadcasting.
Legal eagle takes apart violence report
A lot of people have weighed in on the FCC's report to Congress on televised violence, which essentially recommended that legislators give the FCC the necessary teeth so they can go after it. Peter Gutmann of Womble Carlyle Sandridge & Rice PLLC has given it a thorough going over. You'll find his thoughts through the click below.
| Commentary here |
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Big shoes to fill
After one year of Rosie O'Donnell as moderator, who will take her place at "The View" on ABC? Both TMZ.com and the New York Post report that the frontrunner is Roseanne Barr. No, really. The Post quotes an ABC source as saying the network is missing strong personalities on the show and needs someone who can supply that spark as O'Donnell exits. If not Barr, other names making the rounds include Whoopie Goldberg, Joan Rivers and Connie Chung.
Another source for small TV loans
TVBR is always on the lookout for new broadcast lending sources in the low end of the market because our readers tell us how difficult it is to find anyone doing radio and TV loans below 10 or 15 million bucks. So we are happy to report that Dover Capital Partners, headed by veteran broadcaster Peter Ottmar, is doing senior debt in the 1-6 million range. You read that right - one million to six million. "We like the space a lot. We like working with good management teams," Ottmar told us. Dover will lend as high as six times cash flow, but prefers five times or less. Yes, Ottmar will look at stick deals. For radio he prefers multiple station deals, but adds, "I'll take a hard look at anything." There are obviously fewer TV deals to be done the 1-6 loan range, but Ottmar says he has done LPTVs as well as full powers. With a small team, he says Dover can move quickly to give a yes or no. Some of the funding comes from a hedge fund and Ottmar notes that he has his personal funds in every deal. You can reach him at 401-723-1063, extension 103.
 FBI seeks source
of threatening letters
The FBI field office in Portland, OR and the US Postal Inspection Service have asked for the public's help in identifying who is responsible for dozens of strange, threatening letters sent to broadcast/cable outlets, college athletic departments and individuals in a number of states. Some of the letters contained various powder substances, which the FBI Laboratory determined was a potentially harmful insecticide. The sometimes hard to follow letters complain primarily about TV camera crews focusing on close-ups of cheerleaders and female athletes, apparently convinced that the camera operators are seeking some sort of erotic gratification, but then they also complain that the only shots actually broadcast are of cheerleaders in long-sleeve, less-revealing outfits. The first batch of letters arrived last September bearing postmarks from Portland, OR. Others since have been postmarked in Seattle, WA and Chicago, IL. Anyone with information is asked to contact their local FBI office or call toll-free 886-915-8299. A 5K reward has been offered for information leading to the identification of the person or persons sending the letters.
| Read excerpts distributed by the FBI |
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| Wall Street Media Business Report TM |
Bid for Ion boosted again
With the clock ticking down to a May 4th deadline to exercise a call right and commence a tender offer, NBC Universal and Citadel LP have again improved the terms of their offer to buy out other common and preferred shareholders of Ion Media Networks and take the company private. After meeting with the special committee of the Ion board of directors and their advisors on Friday, NBCU/Citadel sent a formal letter yesterday nailing down their offer to increase the payout to preferred shareholders other than NBCU, primarily by increasing the coupon on proposed new convertible debt from 7% to 11%. NBCU/Citadel also agreed to cover the transaction expenses for Ion. If the buyout offer is accepted, Ion's common shareholders would receive 1.46 per share.
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Ad Business Report TM
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More buyers comment on Philly PPM data
We asked agency buyers yesterday what they thought about Arbitron's initial PPM data release for Philly (4/30/07 RBR #84). The commentary continues today with Natalie Swed Stone, US Director, National Radio Investment, OMD, and Pat McNew, PHD EVP/Local Media Network (LMN) Director of Operations:
 Any comments in general about the Philly PPM numbers coming out?
Said Swed Stone: "We will be looking at the results to determine how radio listening may differ from any previous assumptions-affecting reach, turnover, dayparts, commercials and formats, etc. More detailed and timely research will ultimately change the way programmers and broadcasters program their stations. We will expect to see changes in commercial positioning and other formatting changes on the heels of this type of research."
| Read More... |
Julie Roehm lands Sports Illustrated assignment
Former Wal-Mart Wal-Mart SVP/Marketing Communications Julie Roehm has scored the first gig for her independent marketing consulting firm-a short term marketing project with Sports Illustrated, according to the NY Post. Meanwhile Roehm and Wal-Mart continue their legal battle over severance she claims she is owed under the terms of her employment contract. The retailer filed a counterclaim and upped the ante by releasing embarrassing e-mails between Roehm and her former male co-worker Sean Womack-now a part of her consultancy. Industry sources told The Post a handful of clients have hired them, although Sports Illustrated and parent Time are the first to acknowledge it.
Citi and Publicis strike global ad deal
Citi and Publicis Groupe announced Publicis has been selected to manage Citi's global corporate brand identity and Global Consumer Group (GCG) advertising campaigns. In order to provide Citi with superior expertise across a spectrum of disciplines, Publicis will draw upon resources from a variety of its global operations and agencies. Citi will introduce a new corporate brand identity campaign, developed by this Publicis team, in May of this year. Eventually the themes from that campaign will be integrated into Citi's advertising and marketing programs for its Global Consumer Group's products and services.
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| Media Business Report TM |
AHAA names new leadership team
The Association of Hispanic Advertising Agencies (AHAA) announced the transition of leadership to new Chairwoman Jackie Bird, president/CEO of winglatino. Jose Lopez-Varela, ADN Communications CEO, assumed the role of chair-elect and Laura Marella, SVP/chief growth officer for Casanova Pendrill was elected to the position of vice chair. The AHAA Board of Directors created and approved the new Vice Chair board seat last year to ensure continuity in the association leadership and vision. Carl Kravetz, chairman/chief strategic officer of cruz/kravetz:IDEAS steps down from his role as AHAA chairman but remains a critical leader on the board for the organization's research initiatives. AHAA's new research plans to explore the complexity of Latino identity and benchmark the value that Hispanic advertising agencies provide to advertisers will be announced in the coming weeks.
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| Media Markets & Money TM |
Savannah double-deal details in
A standing JSA in Savannah GA is being sold by two different companies to two other different companies. ABC 22 WJCL-TV is going to New Vision Television while Fox 28 WTGS-TV goes to Parkin Broadcasting. Any guess which is commanding the higher price tag? If you guessed neither, you are the lucky winner. They both are valued at 17.5M for a 35M total. Piedmont Television is selling WJCL, while Bluenose Broadcasting is the seller of record for WTGS. Besides holding the rights to advertising time on the Fox station, New Vision has an option to purchase it should the regulatory climate ever allow such a pairing. If they can buy it on or after the one year anniversary, the price will go up 500K to 18M, with incremental 500K increases through the fourth anniversary to 19.5M. After that, the price will be fair market value as appraised by a neutral consultant.
TVBR observation: Even if Michael Powell's 6/2/03 ownership ruling went through, there was a ban in place on TV duopolies among a market's top four stations. Unless you happen to be in a market where they really love CW, MNT or ION, that almost always means no pairings involving ABC, CBS, Fox or NBC. In other words, we hope nobody is holding their breath in anticipation of this option going through.
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| Washington Media Business Report TM |
Attack on licensees rebuffed
Emmis, Journal, LIN, Radio One and Montecito Broadcast Group all shared a distinction recently. They were under petition to have all of their pending license renewals turned down. The company objecting to their fitness to operate under public license was Broadcast Company of the Americas. BCA was still smarting over the complaints of the group above about its XHBCE-FM in Endensada in Baja North California, Mexico. The group of US companies claimed that BCA had improperly constructed the facilities of its station and further, was pointing its signal northwest and into interference with Lazer Broadcasting's KXRS-FM. BCA admitted that its station was constructed improperly, but claimed it was not AS improperly constructed as claimed, claiming that the above companies were therefore guilty of abuse of process and unfit to control a license. The FCC rejected an earlier BCA attempt on the licenses, and said that this was a mere rehashing with absolutely nothing new to add to the "supposed misrepresentations" made by the US companies. BCA's petitions were again rejected out of hand.
 FCC rejects Illinois time share proposal
Millikin University does not broadcast 24/7 from its WJMU-FM in Decatur IL, and R B Schools decided to take advantage of the station's most recent license renewal to see if it could get a piece of the frequency for itself via time sharing. The process exposed a number of problems. For starters, RB seems to have neglected to attempt to negotiate a time-sharing arrangement, one of the hurdles the FCC says it must clear. It did proceed to find defects with MU, however. For starters, the GM signed the renewal application, even though he is not an officer of director of the licensee. Since in all other respects the application was OK, the FCC allowed this to be corrected, following precedent. RB complained that MU was out of bounds in soliciting testimony in its favor to be delivered to the FCC, and violated ex parte rules by not serving these papers to RB. The FCC agreed that these constituted violations. MU explained that it is little, does not have its own communications attorney, was ignorant of these rules, and did not repeat any of the actions once informed. The FCC as usual noted that ignorance is no excuse, but that the infraction was minor, and in the end, it did not substantially impede RB from making its case. That case was not deemed strong enough to warrant grant of the time sharing arrangement. In the end, MU received an admonition and RB had its petition dismissed.
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| Cable Business Report TM |
 Comcast buys sports net interests from Rainbow
Comcast announced a deal to purchase from Cablevision's programming subsidiary, Rainbow Media Holdings LLC, its 60% interest in FSN Bay Area and its 50% interest in FSN New England for 570 million in cash. Upon completion of the dual transactions, Comcast will own 100% of FSN New England and 60 percent of FSN Bay Area, with the remaining 40 percent still owned by an affiliate of News Corporation. Comcast will operate both networks. "FSN Bay Area and New England are excellent operating businesses and fit strategically into Comcast's portfolio of sports networks. By growing RSNs in markets where Comcast has existing operations, we have a unique opportunity to reinforce our brand image and capitalize on our local presence," said Jeff Shell, President of Comcast Programming Group. The sale of FSN Bay Area and FSN New England allows a divestiture by Cablevision of its only remaining regional sports programming assets located outside of the New York market. "Based on the 570 million purchase price and reported subscribers of 3.9 million for FSN New England and 3.7 million for FSN Bay Area, we believe that the deal values the assets at 135 per subscriber. This compares to our estimates of 275, 105 and 85 per subscriber for ESPN, MTV and TBS respectively. We believe that the premium valuation for the RSN's demonstrates the increasing value of sports programming in a world increasingly penetrated by DVR's. In addition, while we are skeptical of the value created by vertical integration in media, local sports programming can be an exception," said Morgan Stanley analyst Benjamin Swinburne in a note to clients. "From a valuation perspective, this acquisition is not meaningful to our estimates for Comcast, but will likely be accretive to our valuation of Cablevision," he added.
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| Internet Media Business Report TM |
 CBS TV stations adopt Silverlight
for user-generated content
CBS Television Stations announced development of a community-generated content initiative for its network of local websites that uses the new Microsoft Silverlight technology. The new initiative helps bridge the gap between user-generated digital media and traditional TV broadcast while capturing the hearts, minds and local stories of the CBS stations' audiences across the country. The new local initiative will allow users of the CBS O&O stations' sites to view, upload, share, rate, comment, sort and search video, images, audio and text submissions. A key component of the application is its full integration into the existing content publishing workflow of the CBS stations' digital media groups. It allows the community-generated content to be managed alongside the station's professional content in a single workflow. Silverlight integrates with existing web technologies and assets to provide higher-quality experiences with lower costs for media delivery. CBS is working with Microsoft to build the Silverlight-powered beta version of its community-generated content initiative, which is expected to launch in select markets later this year.
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| Stock Talk |
Retreat from record territory
With mixed economic news on Monday, traders pulled back and the Dow Jones Industrial Average pulled back from the record high it set of Friday. The Dow closed down 58 points, or 0.4%, at 13,063.
TV stocks joined in the retreat. ACME fell the most, 3%. Entravision was down 2.2%.
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| Stocks |
Here's how stocks fared on Monday
| Company |
Symbol |
Close |
Change |
Company |
Symbol |
Close |
Change |
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Acme
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ACME
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5.51
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-0.17
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LIN TV
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TVL
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15.96
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unch
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Belo
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BLC
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19.27
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-0.10
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McGraw-Hill
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MHP
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65.53
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-0.72
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| CBS CI. B |
CBS |
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31.77
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-0.27
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Media General
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MEG
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36.74
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-0.57
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| CBS CI. A |
CBSa |
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31.80
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-0.18
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Meredith
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MDP
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57.92
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-0.16
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Clear Channel
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CCU
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35.43
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-0.27
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News Corp.
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NWS
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24.00
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-0.35
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Disney
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DIS
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34.98
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unch
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Nexstar
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NXST
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11.95
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+0.01
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Emmis
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EMMS
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9.99
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-0.16
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NY Times
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NYT
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23.40
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-0.08
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Entravision
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EVC
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9.81
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-0.22
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Ion Media
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ION
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1.25
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+0.02
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Fisher
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FSCI
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48.52
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-0.31
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Saga Commun.
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SGA
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10.00
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-0.14
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Gannett
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GCI
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57.06
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+0.31
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SBS
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SBSA
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3.41
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-0.22
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Gen. Electric
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GE
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36.86
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+0.02
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Scripps
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SSP
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43.30
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+0.03
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Granite
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GBTVK
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0.05
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-0.01
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Sinclair
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SBGI
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16.33
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-0.29
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Gray
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GTN
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10.67
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-0.13
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SWMX
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SWMX
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0.55
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unch
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Gray, C1. A
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GTNa
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11.40
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unch
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Time Warner
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TWX
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20.63
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+0.02
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Hearst-Argyle
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HTV
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26.63
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+0.27
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Tribune
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TRB
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32.80
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unch
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Journal Comm.
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JRN
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13.49
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unch
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Wash. Post
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WPO
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744.00
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-0.19
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Lincoln Natl.
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LNC
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71.15
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-0.02
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Young
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YBTVA
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4.56
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+0.36
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Bounceback
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 We want to
hear from you.
This is your column, so send your comments and
a photo to tvnews@rbr.com
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Below the Fold
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Cable Business Report
Comcast buys
Sports net interests from Rainbow...
Ad Business Report
Julie Roehm lands
Sports Illustrated assignment...
Media Markets & Money
Savannah double-deal
A standing JSA in Savannah GA is being sold by 2 different companies to 2 other different companies...
FCC rejects Illinois
Time share proposal as Millikin
University doesn't broadcast 24/7...
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TV Media Moves
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Upped in Cleveland
Fox O&O WJW-TV (Ch. 8) Cleveland has promoted VP/News Director Greg Easterly to General Manager. He succeeds Mike Renda, who was recently named GM of WTXF-TV (Ch. 29) Philadelphia (4/4/07 TVBR #66), also a Fox O&O.
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More News Headlines
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Irving Waugh
dead at 94
The Tennessean newspaper in Nashville reports the death of former WSM radio and TV President Irving Waugh. The paper said he died Monday of heart failure at age 94. As longtime head of the stations, Waugh is also credited with helping to bring the Opryland theme park to life and working to put the Country Music Association awards show on network TV. Waugh retired from broadcasting in 1977 and was appointed Commissioner of Tourist Development under Gov. Lamar Alexander, a post he held for two years. Waugh continued as executive producer of the CMA Awards Show through 1992.
Getting interactive
Journal Broadcast Group has promoted Jeff Kuether to Director of Interactive Media Sales, effective immediately. Kuether will continue to serve as Director of Sales for Journal's Milwaukee radio stations, a position he's held since 1997.
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TVBR Radar 2007
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Television News you won't read any where else. TVBR--First, Accurate, and Independently Owned.
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Wall Street pressure to spin NBC
General Electric stock jumped a buck on Friday after Citigroup analyst Jeffrey Sprague issued a research report that called on GE to set free three units which are not core to the industrial giant. One of those is NBC Universal, which Sprague said "has no meaningful synergy with the rest of the portfolio."
TVBR observation: Don't rule it out. There had been previous hints that Immelt had gotten more directly involved in how NBC Uni is run to prepare the company for a spin off from the mother ship. Of all the units at GE, the TV/entertainment unit is clearly the odd duck. Would it be better valued by Wall Street as a standalone operation? And then, of course, there are those rumors that Google might take out its checkbook to buy its way into another area of media in a big way...
04/30/07 TVBR #84
Humpty Clear Channel
apart for good?
Former FCC Commissioner Harold Furchtgott-Roth says that the break-up of Clear Channel, for some, is a "bitter pill" in an essay called "Dismembering Clear Channel" published last week in the New York Sun. He notes that the fate of the current per-share offering for the company is uncertain, but that a sell-off is going on in any case. "Once the company is dismembered, it can never be put together again.
RBR observation: We occasionally see anecdotal evidence that one reason Clear Channel may be struggling is that no matter how local a large company tries to be, it simply isn't an easy task to pull off from one building in San Antonio. The top of a hierarchy can't help but try to govern the entire group, with varying effects down the line. For example, the effects of a new challenge in Hooterville are immediately apparent to Mom & Pop's Hooterville Broadcasting Company. If nothing else, the GM at the Clear Channel cluster across town may have to get blessings from Corporate to do what Mom and Pop did three weeks ago. Anyway, what investors see as a "bitter pill" may be seen as "blessed relief" by fans of local broadcasting. Any thoughts? That's what our Bounceback section is for radionews@rbr.com .
04/30/07 RBR #84
First "currency" data
from Philadelphia PPM
Arbitron released the first "currency" radio ratings from the Philadelphia PPM ratings, covering 3/8-4/4. One compelling new finding is the dramatic increase in the composition of the radio audience (persons 18+) who are employed Full Time compared to what was reported by the diary. See charts in this page report of RBR and also see Ad Business Report on Agency comments.
04/30/07 RBR #84
Cheers and jeers for violence report
The FCC's open-ended recommendation to Congress that it go ahead and write up some laws concerning broadcast violence did not go unnoticed among the megaphone holders. For starters, both the NAB and NCTA would prefer that parental controls be given a chance to work.
TVBR observation: Apparently the Founding Fathers somehow telegraphed that speech regulation powers are right there in the Constitution, if only you have the will and ability to find them between the lines, or somewhere. Evidently, the actual text seen by those so gifted is something along these lines: "First Amendment excerpt, 2007 edition: Congress shall make no law...abridging the freedom of speech, unless urged to do so by a group of five unelected self-appointed national nannies installed in a federal bureaucracy that doesn't even exist yet, and that includes the power to eliminate all the times Daffy Duck's bill gets shot to the back of his head by Elmer Fudd, so there." For the Watchdog statements read this page in TVBR.
04/27/07 TVBR #83
Nothing to fear on PPM in Philly
RBR asked Kathy Crawford, MindShare President/Local Broadcast, about fears that there will be lower AQH numbers and therefore less dollars for radio in the market. Will buyers increase the CPP value to compensate? How will it pan out in negotiations? "The same way that it happened with the LPM [Local People Meter-for TV]. The bottom line was the pricing didn't change, the CPP changed," (for the Q&A with Crawford see this page report in TVBR)
04/27/07 TVBR #83
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Hard finding that key person
to fill the important position at your organization? Media HeadHunters is the place that key media firms use to get results. See Media HeadHunters and get results with service--Period.
Need assistance
contact Cathy Carnegie
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