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Volume 23, Issue 10, Jim Carnegie, Editor & Publisher
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Monday Morning January 16th, 2006
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Radio News ®
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 PPM with agencies
are Rock'n & Roll'n
In addition to IPG, which announced its agreement to use the PPM service when it becomes available (1/12/06 RBR #8), WPP, Publicis Groupe and Aegis have also signed similar intent-to-use agreements with Arbitron. Ironically, note the observation from our story last week: "This is a great vote of confidence from IPG. When more agencies make similar proclamations of intent-to-use, the case should become easier to make with broadcasters - - and Nielsen. Bottom line - - agencies want reliable data to make their clients the most ROI. PPM may not be proven as perfect yet, but it's much, much more accurate than diaries." Broken down, the four media agency groups comprise quite a lot of radio's spend. IPG media agencies planning and buying for radio include Initiative Media and Universal McCann. WPP agencies include Ford Motor Media, Mediaedge: cia, MindShare and Mediacom. Publicis Groupe agencies include Starcom MediaVest and ZenithOptimedia. Aegis agencies include Carat Americas.
| Read agency comments |
RBR observation: This will become one of the main marching tunes to down load for '06 - Technology waits for no one. It will be interesting to listen what key ad agency executives have to discuss in coming weeks at the annual 4A's conference, which RBR will be there to give you the full and complete RBR observation. Only words of encouragement today - move forward with technology and do not wait for anyone or company for a second or alternative ratings services to displace Arbitron - It will not or can not happen - Period.
 Alarcon hanging tough on TV buy
Wall Street has been decidedly negative on plans by Hispanic radio specialist Spanish Broadcasting System to get into TV as well. Since the 37 million bucks deal to buy WDLP-TV Key West-Miami was announced last July, the company's stock has fallen by nearly half, from nearly 10 bucks to recently trading below 5.50 - - and briefly traded in penny stock territory, below five bucks, in December. Investors beat down the stock because they want SBS to remain a pure play radio group and they've beaten up on CEO Raul Alarcon in his quarterly conference calls for making the TV move. Here's a particularly testy exchange from SBS' Q3 results call in December, with an investor berating Alarcon for sacrificing 300 million in equity value to make a 37 million acquisition. But there would be a price to pay if SBS were to abandon the TV purchase. It has now increased its initial down payment of 500K to 2.05 million, having made a 250K extension payment and an additional payment of 1.3 million (including a second extension payment of 300K) last week. SBS now faces a February 28th deadline to close on the TV buy, by which time it must pay an additional 17 million in cash and sign a promissory note for 18.5 million.
Liberals take the lead in Alito airwars
The ongoing tally of spending on Supreme Court nomination fights from Brennan Center for Justice at New York University School of Law and the Justice at Stake Campaign has taken into account another week, and it shows an advantage to the left for the first time since opening salvos were fired last spring before there were even any open seats. A week of spending just prior to the onset of actual Senate hearings on the Samuel Alito nomination matched that spent in the month-plus since his nomination was announced, taking the total all the way to 1.3M. The anti-Alito faction spent 700K, countered by 600K of spending from Progress for America, the only conservative pro-Alito group to engage in the battle. The 1.3M brings the Alito spending on par with the Roberts nomination airwars, a number which should be eclipsed easily when the final expenditures made during the hearings are added in. PFA annouced it will continue spending on ads to run up until 1/20/06 - - it'll drop another 250K in a campaign featuring Democrats who are for Alito's confirmation.
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Smee defense fails to exonerate CA pirate
"It wasn't me, it was Smee." These could have been the words of Peter Pan nemesis Captain Hook, trying to dodge justice by saying he was acting on the advice of his trusted mate, Mr. Smee. Jose A. Mollinedo of Victorville CA used just such a defense for his unauthorized use of the airwaves occupying 90.9 mHz. The station was tracked to his residence by FCC field agents, who left notification that the station had to shut down, and followed that up with an actual conversation on the topic a few days later. The station did shut down, for awhile, but eventually came back on the air. According to the FCC's account of Mollinedo's defense, he said that, "...an associate told him that he apparently did not need a license if he only played music but did not play advertisements." [Ed. note: A fitting theory, don't you think, for a pirate operating in the reserved band?] Of course, Mollinedo's arguments held about as much water as a slotted spoon, and the FCC has hit him with a 10K assessment for piracy on the low end of the FM radio spectrum.
FM Auction No. 62 edges over 12.5M
That's after four completed rounds, and it's the measurement of virtual dollars - - when rookie discounts are taken into account, total actual value followed into double-digit million territory, at 10.3M. Two sticks are commanding just over half a mil. The two top properties from the first day are still at the top of the bidding war chart - - Satellite Beach FL has pulled a bid just under 1.3M from Horton Broadcasting, and Indian Wells CA has 1.235M on the table from James D. McDaniel. Sandwiched in between is the Bristol VT stick, commanding 1.255M from Fine Arts Broadcasting. The number of sticks still unclaimed has been reduced to 11.
 Salem well-positioned
for next Media-trend?
Paul R. La Monica of CNNmoney.com says there will always be a media market for car crashes, loud explosions and risqué content. However, he notes a growing demand for content that is not just family-oriented, but also religious-oriented. He mentions movies such as "The Chronicles of Narnia: The Lion, the Witch and the Wardrobe" and "The Passion of the Christ." And Dan Brown's "The Da Vinci Code," also soon to be released in movie form, which is very much a religion-themed work (although in its case, there will likely be many religious people who will not view it positively). La Monica notes that the trend extends into other media, and mentions a recent Clear Channel format flip in Austin TX, where it took an FM station from Rock to Contemporary Christian. Getting the best radio mention, however, and deservedly so, is the king of Contemporary Christian, Salem Communications. If the public taste is moving toward religious content, it's moving to a place where Salem is already firmly entrenched. La Monica says that the group is widely expected to outperform the industry in 2006, calling for a 7% increase in revenue and a 33% increase in profit.
RBR observation: Like we keep saying, location is everything, even when the location is a lucrative format niche.
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Ad Business Report TM
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 Microsoft plans
search advertising system
Microsoft has assigned dozens of skilled researchers to devise new technology to improve the effectiveness of online advertising, and announced plans to launch its system for selling ads alongside regular search results by June. Microsoft has been testing its new platform for selling online advertising, called adCenter, since last spring. Microsoft unveiled adCenter Incubation Lab (adLab) during its adCenter Demo Fest, an exposition of research and innovation in the field of digital advertising technology from Microsoft researchers. adLab, a joint effort between MSN's adCenter and Microsoft Research, is a state-of-the-art lab in Beijing with a mission to research and incubate advanced technologies for adCenter, designed to provide advertisers with rich targeting capabilities based on audience intelligence information and give consumers a more relevant online experience. Right now, the company said about 25% of the sponsored links that accompany regular search results on its MSN Search site are from adCenter, but that will grow to 100% in June. Microsoft currently out sources the job of providing such sponsored links to a Yahoo subsidiary, Overture Services, although the contract between the two is set to expire in-you guessed it--June. Needless to say, the move to bring that job in-house is important because competitors such as Google make most of their money selling ads placed next to search results. One of the technologies also highlighted at the event was video hyperlink ads, which can detect product items displayed on a television screen during a show or commercial, allowing consumers to zoom into products featured on the television screen and click through to detailed product descriptions and information on where the products can be bought.
WPP restructures ad unit for Ford
WPP announced a restructuring plan for its agencies into a one stop shop. "Team Ford" will be based in Dearborn, the automaker's HQ suburb neat Detroit. The shops are JWT and sibling Ford Motor Media, both in Detroit; Ogilvy & Mather, Dearborn; plus Young & Rubicam's Y&R, Wunderman, Mediaedge:cia and MindShare, all Dearborn. Advertising Age had reported plans for the shops to be located in two Dearborn buildings, but this restructuring goes further, by creating a number of new units for Ford's needs: Shared Media Services, Brand Experience Services and Shared Administrative Services. Employees will still technically be employed by their current agencies, but they will report up through the chiefs of the new units. For example, there will be one chief at Brand Experience Services who will oversee all customer relationship marketing work, but those who report into that person will include JWT staffers on Ford brands or Y&R staffers on the Lincoln and Mercury brands, said AdAge. WPP's Shared Media Services unit will have co-chiefs: Jack Valente, managing partner-general manager of Mediaedge:cia, Detroit, and Andy Prakken, now executive director-communications services at JWT overseeing Ford Motor Media. The Brand Experience Services unit will pool resources of the agencies for CRM, direct, brand experiences, lifestyle PR and data. Tim Copacia, managing director of Wunderman, will lead that group. The Shared Administrative Services will pool the shops' finance, quality, human resources, facilities and IT departments.
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IPG sues Sir Frank Lowe
The Interpublic Group announced it has initiated proceedings against Frank Lowe, the formed head of its Lowe Worldwide agency network, for violation of contractual and fiduciary duties. The claim states that, using confidential and proprietary information related to clients and agency personnel that was garnered as a result of his employment by Lowe Worldwide, Mr. Lowe has begun a campaign to induce such executives and clients to leave the Lowe agency and join a rival firm which he's establishing. IPG will pursue its claims before the American Arbitration Association in the state of New York. Commenting on its claim, IPG stated: "Frank Lowe sold his agency to Interpublic in 1990 for tens of millions of dollars and subsequently received many times that amount in financial support and resources to build a global network, recruit and compensate key talent. Our claim states that, in breach of his continuing fiduciary responsibilities, he has chosen to use contacts and proprietary knowledge to damage Lowe and Interpublic. We will be asking the court for monetary compensation and injunctive action. We also intend to hold any Lowe employee seeking to join Mr. Lowe to their full notice period."
 Volkswagen launches
podcasting campaign from Detroit
Picked the Detroit Auto Show to launch a unique podcasting marketing campaign that will not only give international internet visitors an insider look at its newest cars and access to a candid conversation with Volkswagen's top brand chief, but also offer web listeners a touch of "Detroit flavor," including the chance to hear a different emerging Detroit musician every day of the auto show that opens to the public last weekend and this week. Volkswagen said it created the numerous podcasts, which can be found via the automaker's main North American website at www.vwpodcast.com , to create a buzz about its new 2006 and 2007 cars, such as the all-new GTI sports hatchback, and just as importantly to try and give outsiders a taste of Detroit, which is host to one of the world's most highly touted auto shows. To help lend even more local flavor to the podcasts, Volkswagen is using local radio personality, Ann Delisi, to voice introductions to the podcasts as well as to conduct interviews with enthusiasts and auto industry experts. Featured interviews include an in-depth conversation with the brand's new leader, Dr. Wolfgang Bernhard, Chairman of the Volkswagen Brand Management, and other top Volkswagen execs. Expert automotive journalists are also asked to opine for this exclusive podcast. Volkswagen has also provided vehicle "walkaround" podcasts of the 2006 GTI and the 2007 Passat Wagon. These podcasts offer listeners an in-depth, technical look at the new vehicles and tempt them to see the cars in person. The automaker teamed with Quill Communications of Royal Oak, MI and digital partner, Proxicom for the effort.
Radio buyers to appear at RAB '06 panel session
An all-star panel media buyers is being presented at RAB'06, discussing radio's strengths, weaknesses, and opportunities. The panel presentation will occur during the Arbitron-sponsored Friday morning keynote breakfast. Panel participants include:
Janice Finkel-Greene, EVP/Associate Director, Local Broadcast,
Initiative Media, New York
Matt Feinberg, SVP/Radio, National Broadcast Department,
Zenith Media Services, New York
Kathy Crawford, President, Local Broadcast, Mindshare, New York
Tammy Guest, Vice President, Media Services, Love Advertising, Houston
"This 'view from the top' will provide insights into what buyers believe Radio owners, managers, and sellers need to do to revitalize industry growth," noted Executive Vice President, Training and Meetings, George Hyde.
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| Media Business Report TM |
Elevator music? You ain't seen nuthin' yet
In China, a media merger has gone down between video companies that put out content that is pure, unadulterated commercials. The venue is a large number of liquid-crystal-display screens hung, apparently like Spiderman, wherever there's a place to hang - - especially in elevator lobbies in apartments and office buildings. According to BusinessWeek Online, a company with 35K such screens in 52 Chinese cities is buying another that will take it to 60K screens in 75 cities. The article says it is seen as a novelty in China, where advertising is a relatively new phenomenon. Some venues are even allowing screen hanging free of charge to upgrade a building's ambience (if you can imagine). However, speculation is that the practice wouldn't necessarily go over so well here in the West.
RBR observation: Oh, yeah? Whether it would go over well or not, we have no doubt that it's but a matter of time before someone bellies up to the table for a piece of media pie with a similar venture over here. We are only surprised that someone over here didn't think of it first.
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| Media Markets & Money TM |
NRG ownership worth the Waitt
There should be little indication of any change on the ground in Norfolk NE when NRG Radio takes over at KNEN-FM. It's contracted to spend 1.8M for the station, which it's buying from Central Radio Inc. The lack of discernible effect will be due to the relationship the station has had with Waitt Radio going back all the way to 12/22/99, when it entered into an LMA/option with Norman Waitt's outfit. Norman Waitt's outfit is now NRG, embellished by its merger with Mary Quass's former group. The station in a cluster which also includes KTCH AM & FM Wayne NE.
Close encounter in Sand Springs
Broker John Pierce has another closing to report, and once again it involves rapidly expanding Davidson Media. This time, its at KTFX-AM Sand Springs OK, part of the Tulsa market. The seller is William H. Payne who, according to documents filed with the FCC, is getting 1.025M for the station.
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| Washington Media Business Report TM |
FCC Open meeting pegged for Friday
The FCC's first open meeting of the year will follow its usual agenda. Bureau chiefs and other similarly titled execs within the commission will comment on last years' efforts - - usually finding much to commend those efforts, and shed light - - usually only just about as much as has already been shed, on efforts to be made in the year ahead. For radio companies, who deal mostly with the Media and Enforcement Bureaus, it will be another chance to see the new heads at each, which both turned over last year. Donna Gregg replaced Ken Ferree at Media, and Kris Montieth is in charge at Enforcement after the departure of David Solomon. The meeting will be 1/20/06 at 9:30 eastern.
 FCC assembles Katrina panel
FCC Chairman Kevin Martin is putting together a multi-discipline panel, and calling it the Independent Panel Reviewing the Impact of Hurricane Katrina on Communications Networks. Its mission: to "review the impact of Hurricane Katrina on the telecommunications and media infrastructure in the affected area and will make recommendations to the Commission regarding ways to improve disaster preparedness, network reliability, and communications among first responders by June 15, 2006." Two broadcast representatives will serve along with local officials from the affected areas and members of other related industries. They are Steve Davis, SVP/Engineering, Clear Channel Radio and Martin D. Hadfield, VP/Engineering, Entercom. The panel will spend a full day together 1/30/06 at FCC headquarters in Washington in a session open to the public.
RBR observation: Martin, unlike many in the government, has little to fear from close scrutiny of the FCC response to Katrina. The FCC was widely praised for its swift reaction to the crisis.
| Complete list of panel members here |
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| Ratings & Research |
Eastlan goes beachfront on Lake Michigan
Radio station rating provider Eastlan has announced that Benton Harbor MI will be the next addition to its market portfolio. The previously-unrated market also includes the town of St. Joseph, on the southern portion of Michigan's Lake Michigan shoreline. Ratings will begin this spring. While Benton Harbor may be unrated, it is not too far from places that are. To the east is Kalamazoo, and southeast is South Bend. And if you go a little farther southwest you come to a quaint little place known as Chicago. Eastlan's Mike Gould noted his company's pattern of growth in 2005, and said Benton Harbor would be the first of many additions. "We will have six or seven new markets under contract by the end of January."
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| Consumer Research |
 Consumer Intentions & Actions Survey
BIGresearch's Consumer Intentions & Actions Survey monitors over 8,000 consumers each month providing unique insights & identifying opportunities in a fragmented and transitory marketplace. . Here are some of January's results and broken down for you to examine plus integrate into your business and personal planning - focus on Economy and Personal/Financial.
RBR observation: Provided by RBR to help you succeed in business and with your personal goals. (Respondents surveyed 1/04 - 1/11/06):
| Read More... |
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| Monday Morning Makers & Shakers |
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Transactions: 12/5/05-12/9/05
TV came back into play in the first full week of December, and provided enough oomph to allow a few radio agreements (and another small TV transaction) to push the week over 100M in value. Still, almost all of the action was taking place in smaller markets.
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Total
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Total Deals
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9
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AMs
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6
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FMs
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12
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TVs
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2
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| Value |
105.26M
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| Complete Charts |
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Radio Transactions of the Week
This Bond is called Double O Texas
| More... |
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TV Transactions of the Week
Gray takes over for Notre Dame
| More... |
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| Transactions |
20.3M KPOU-TV Portland OR (La Grande OR) from La Grande Broadcasting Inc., a subsidiary of Equity Broadcasting Corp. (Larry Morton et al) to Fisher Broadcasting Co. (Colleen B. Brown, Robert C. Bateman et al). 1M escrow, balance in cash at closing. Duopoly with KATU-TV (same market but no signal overlap). KPOU is a Univision affiliate on Channel 16; KATU is an ABC affiliate on Channel 2. [File date 12/22/05.]
6M KQJZ-FM Austin (Hutto TX) and KQQT-FM Gonzales TX from Central Texas Radio Inc. (Andrew T. McGregor et al) to Educational Media Foundation (Richard Jenkins). 300K escrow, 900K cash at closing, 4.8M note. Based on purchase option of 1/17/05. [File date 12/22/05.]
1.25M WGGO-AM/WQRT-FM Olean NY (Salamanca NY) from CATT Communications Inc. (Michael Washington) to Pembrook Pines Inc. (Robert J. Pfunter). 25K deposit, 325K cash at closing, 543.5K note, 356.5K. Includes non-compete. Buyer also takes on mortgage with maximum liability of 280K. Superduopoly with WOEN-AM/WMXO-FM Olean NY and WZKZ-FM Alfred NY. [File date 12/21/05.]
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| Stock Talk |
Mixed news produces mixed results
There was mixed economic news on Friday. The government's monthly report on inflation at the producer level was better than expected, but the retail sales report was worse than expected. The Dow Industrials dipped two points to 10,960, but other broad indices were up slightly.
Radio stocks were also mixed. The Radio Index edged up 0.143, or 0.08%, to 180.402. The biggest moves were to the upside, but still not a lot. Beasley rose 1.8% and Entravision gained 1.1%.
NOTE: US markets are closed today in observance of the Martin Luther King holiday.
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| Radio Stocks |
Here's how stocks fared on Friday
| Company |
Symbol |
Close |
Change |
Company |
Symbol |
Close |
Change |
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Arbitron
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ARB
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39.25
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-0.01
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Hearst-Argyle
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HTV
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23.76
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-0.22
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Beasley
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BBGI
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13.97
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+0.24
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Interep
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IREP
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0.39
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unch
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| CBS CI. B |
CBS |
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25.48
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-0.51
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Jeff-Pilot
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JP
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58.24
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-0.23
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| CBS CI. A |
CBSa |
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25.53
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-0.50
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Journal Comm.
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JRN
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13.71
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-0.07
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| Citadel |
CDL |
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13.13 |
-0.03 |
Radio One, Cl. A
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ROIA
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10.27
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unch
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Clear Channel
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CCU
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31.73
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unch
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Radio One, Cl. D
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ROIAK
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10.31
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-0.05
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Cox Radio
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CXR
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14.06
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+0.13
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Regent
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RGCI
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4.72
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+0.02
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Cumulus
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CMLS
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13.40
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-0.11
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Saga Commun.
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SGA
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10.02
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-0.05
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Disney
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DIS
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25.70
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+0.06
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Salem Comm.
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SALM
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15.90
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-0.07
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Emmis
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EMMS
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17.93
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+0.02
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Sirius Sat. Radio
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SIRI
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6.28
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+0.08
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| Entercom |
ETM
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30.01
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-0.24
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Spanish Bcg.
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SBSA
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5.37
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-0.03
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Entravision
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EVC
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7.14
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+0.08
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Univision
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UVN
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31.59
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-0.22
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Fisher
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FSCI
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42.43
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+0.33
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Westwood One
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WON
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16.06
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+0.03
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Gaylord
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GET
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42.93
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-0.23
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XM Sat. Radio
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XMSR
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28.92
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-0.07
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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 [email protected]
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Below the Fold
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Ad Business Report
Microsoft at it again
Plans search advertising system means your ad dollars go internet...
Volkswagen goes Podcasting
Picked the auto show to intro it's newest campaign...
Washington Media Business Report
FCC Open meeting
pegged for Friday
First open meeting of the year will follow its usual agenda...
Consumer Research
Focused for personal planning
RBR inside look to help you personally...
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Radio Media Moves
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 Bell rings in Miami
Matthew Bell has been named General Manager of Beasley's WPOW-FM Miami. He had previously been General Sales Manager of the station.
She's da Bomb
Pattie Moreno has been named Program director of Entravision's KBMB-FM Sacramento "103.5 The Bomb." She had been PD and director of operations for MEC Network's XMOF-FM San Diego-Tijuana.
 From Oldies
to Soft Rock
Bobby Lane is shifting stations, but staying with Beasley Broadcasting. Beginning today, he's morning host on WMFV-FM Greenville, NC "Soft Rock V103," transitioning from a recent stint at WFLB-FM Fayetteville before its format flip on New Year's Day from Oldies to Classic Hits.
Legal beagle for XM
Dara Altman has joined XM Satellite Radio as Exec. VP of Business and Legal Affairs. She had previously been Sr. VP and General Counsel of Reiss Media Enterprises.
Greater Media
ups Paul Blake
Greater Media announced Paul Blake has been promoted to DOS of its Philadelphia based radio properties. A Philadelphia native, Blake has been with Greater Media Philadelphia for the past three years as the GSM of WMMR-FM. Under his new responsibilities, Blake will oversee the sales for WBEN-FM, WMGK-FM, WMMR-FM, WPEN-AM and Greater Media Marketing, a division which offers customized marketing solutions for non-traditional clients.
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Stations for Sale
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WOLF Call Letters For Sale
WWOF-AM/WWOF-FM
AM-$10,000 FM-$50,000
Both-$54,000
Contact [email protected]
Suburban NYC AM
Time Leased, profitable.
Comes w. 14 acre T/studio
site. 1.6M firm.
[email protected] or
lv msg @ 781-848-4201
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RBR Radar 2005
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Radio News you won't read any where else. RBR--First, Accurate, and Independently Owned.
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RIAA threat to HD Radio
NAB President & CEO David Rehr has written to RIAA, seeking cooperation on a way to address RIAA's concerns about content and copyright protection - - without scrapping everything that's been done to date to roll out HD Radio. Rehr complains that some of the proposals put forth by RIAA would simply be unacceptable to broadcasters.
RBR observation: Move forward with HD now.
01/13/06 RBR #9
IPG signs for PPM
The Interpublic Group (IPG), which represents more than 30% of all of radio's national spot dollars, has committed to using the ratings provided by the PPM to plan and buy radio once Arbitron deploys its electronic measurement service. However, this does not commit Arbitron to a specific timetable for PPM deployment. Jean Pool, EVP/Director of North American Operations, Universal McCann "Wonderful. It's simply better research. And God only knows we are so far behind Europe and much of the rest of the world in the research product that we value our inventory on."
RBR observation: This is a great vote of confidence from IPG. When more agencies make similar proclamations of intent-to-use, the case should become easier to make with broadcasters - - and Nielsen. Bottom line - - agencies want reliable data to make their clients the most ROI. PPM may not be proven as perfect yet, but it's much, much more accurate than diaries.
01/12/06 RBR #8
NBC looking to
lighten O&O portfolio
TVBR sources confirm that NBC Universal is shopping four of its smaller market O&O stations - - not so much for the 600 million or so that they're expected to bring, but so that NBC can look to buy and build NBC/Telemundo duopolies in growth markets with large Hispanic populations. Birmingham, AL, Columbus, OH, Providence, RI and Raleigh, NC don't fit that profile, so NBC is looking for buyers. UBS is said to be handling the sell-off. News of NBC's plans to sell the four stations
TVBR observation: If you are a buyer in TV, there are plenty of tires to kick on the lot. In the December 2005 issue of Radio & Television Report, we noted that 20 stations had been publicly been put on the auction block by Emmis, Raycom and Nexstar. Since then Raycom has announced one station sale, so these four from NBC put the count at 23. How many more are being shopped more quietly? Here's the NBC shopping list of stations and their stats -
01/12/06 TVBR #8
 Could broadcast stocks Fall double digits this year?
That's the warning to investors from Harris Nesbitt analyst Lee Westerfield, who says new mobile tech and advertising risks create an equity downside of 15-20% in 2006 for broadcast stocks. That's on top of the losses that almost all radio and TV stocks suffered in 2005. Just back from the Consumer Electronics Show in Las Vegas, Westerfield sees threats from mobile broadband and PC-to-TV video convergence. "Announcements at CES foreshadow events ahead in 2006, such as a) deepening web media partnerships between mobile broadband players and the likes of Yahoo! and Google; and b) launch of Microsoft Vista [new operating system] with its media functionality this coming fall," the analysts said in a note to investors. As such, Westerfield is maintaining his "Negative" rating on the broadcasting sector (although he does like the Hispanic specialists). He expects pure-play radio company values to contract from their current multiples of around 11.5 times EBITDA to 10 times and pure-play TV from 10.5 to nine times.
RBR observation: We and a few others have been saying for years that mobile broadband, not satellite radio, is the big threat that terrestrial radio is going to have to deal with. In fact, we don't see how either XM or Sirius will be able to stay in business once mobile broadband becomes widespread. Terrestrial radio broadcasters will have to figure out how to compete with their own broadband offerings, as well as HD Radio, to compete as thousands of Internet audio streams become available to every car driving around in their local market. But realize the Facts - Technology is waiting for no one including the broadcasters and related companies doing business in the media. Traditional means of conducting business have finally have seen closure. Technology waits for no one - Period. Trying to slow it down will only result to self imploding.
01/11/06 RBR #7
Winds of Naples hit Emmis
Emmis execs cautious about ad market as National radio business was stronger than local in fiscal Q3 for Emmis Communications, but company officials told analysts in their quarterly conference call that the strength for national was due more to the company's collection of stations, rather than any trend for the industry. Also, the situation has now reversed, with local a bit stronger. Looking further ahead said national is currently pacing flat for fiscal Q1, which begins in March. Since auto fell to #2 for the quarter, we wondered what was #1. Cummings told RBR it was Media, which jumped 19% for the quarter. However, he believes that's an anomaly and that auto will again be the #1category in the current quarter.
RBR observation: We stated that the RBR eyes focus on Emmis as the temperature reading for the radio business and now we will have to take into account the wind chill factor. It is going to be a cold 2006 as many conference calls on the way will demonstrate that there is a cold wind blowing through Naples this year. Bear Sterns has already taken their first step and it will not surprise us at RBR to see others follow their recommendation and not just Emmis but many in the radio business. Radio will have to find new ways and use new media technology to face this problem with national spot giving the agency more accountability with ROI.
01/10/06 RBR #6
Negative on Radio continues;
Lehman Brothers official coverage of the radio stock sector - - and doesn't see much to excitement except for CBS, Univision and Radio One, analyst Anthony DiClemente isn't recommending the other radio stocks. After seeing only flat revenues for radio in 2005, he's looking for only 1% growth in 2006.
RBR observation: There has been plenty of negative to go around from '05 and the Wall Street saying applies - The Fish Stinks at the Head. Radio CEO's now must be held accountable.
01/09/06 RBR #5
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