Radio News ®

SportsLine.com raises "for sale" sign
Does Viacom like its investment in SportsLine.com enough to increase its investment from 40% to 100%? The Internet-based sports media company, which runs the cbs.sportsline.com web site, has put itself up for sale, hiring the investment bankers at Perseus Group to explore "strategic alternatives" for the company - - Wall Street talk for finding a buyer. CEO Michael Levy and his board think the company's stock is underpriced and he doesn't want to hand over another big chunk of cheap stock when a $35 million payment to Viacom comes due July 1st. RBR observation: With its stock price stuck near $1 for about two years (it was once over $60), SportsLine faces a big problem when it is due to hand over another $35 million worth of stock to Viacom on July 1st. If its stock price remains near where it is now, that stock payment will push Viacom's stake well over 50%. Levy and his board of directors think that would be giving Viacom control of the company on the cheap, so they're looking for a better deal. Might Viacom be willing to pony up and buy out other shareholders to protect its investment? We wait to see what Sumner and Mel decide to do. | Full Story | RBR Observation |

Sirius in deal with EchoStar
Sirius Satellite Radio CEO Joe Clayton told us this was coming last month in his quarterly conference call (4/22/04 RBR Daily Epaper #79), but now the deal has been officially announced. Sirius' audio channels are going to be carried on EchoStar's Dish Network satellite TV system. Most Dish subscribers will get the audio at no extra charge, although subscribers to certain packages will have to pay extra if they want Sirius. The idea is to expose people to the commercial-free music channels so they will want to buy Sirius receivers and service for their cars. The deal with EchoStar will also have Sirius' service marketed in 10,000 Dish Network retail outlets.

Congress wants FCC to study a la carte
A side issue to the current indecency flap has involved the concept of a la carte channel selection as an option which multichannel video program distributors (MVPD) may offer to subscribers. A bipartisan group of House Energy and Commerce Committee members has asked the FCC to report on the viability of such a regimen. The a la carte concept has also been a pet project of Senate Commerce Committee Chairman John McCain (R-AZ), particularly as it pertains to the cable side of the MVPD equation. At a recent hearing, McCain produced evidence that such options work just fine in Canada saying that it makes no sense for subscribers to be forced to pay for channels they don't watch. The indecency tie-in is outrage over subscribers being forced to pay for channels which carry material which they feel compelled to keep away from their children. Blocking technology, which is being promoted by the cable industry, also sparks outrage. People do not want to pay for something which they then have to take extra steps to block. RBR observation: Some times a buffet supper makes more sense so broadcasters bone up on this issue and read real close. You may not be able to go back for seconds. | Full Story |

HHS Medicare ad ruled illegal
The General Accounting Office has declared that videos produced and distributed by the Health and Human Services Department which promoted the upcoming and controversial Medicare prescription drug were in fact a form of illegal political advertising. The biggest problem cited was that the made-for-the-news spots did not properly identify HHS as the source. The spots were designed as video press releases, ready to be plugged into a television newscast. Two English versions and one in Spanish ended with an actor identifying himself/herself as a reporter in Washington, DC. GAO, which investigated the situation at the behest of Sen. Frank Lautenberg (D-NJ), said the ads violated a law against distributing propaganda with the use of taxpayer money. The Bush administration claimed that the spots were simply designed to publicize the changes in the Medicare system. Opponents said they were an attempt to "manipulate the press." Although the GAO reportedly had problems with the spots in general, the main failing cited was the lack of clear identification of HHS as their source.

Sol sets for Philly buccaneers
El Sol 95.3 is what was after feds confiscated broadcasting equipment used by an unlicensed operation to broadcast over Philadelphia airwaves for some five months, according to an article in Newsday.com. The station's operators had claimed to be indigenous North Americans, and not subject to state of federal law. The group operating the station was called the Moors, and was operating under the authority of Queen Ali. They apparently went so far as to render a $36M judgment against the FCC and the Chief Clerk of the US House of Representatives. According to Newsday, the group goes by the name Al Moroccan Empire as well as the shorter name above, and has had other brushes with the law.

Redstone sparring with New York Post
Viacom Chairman & CEO Sumner Redstone may not have any disagreement with President & CEO Mel Karmazin, but he certainly does have a feud going with Rupert Murdoch's New York Post. After Redstone told shareholders that he and Karmazin are in sync on where the company is heading (5/20/04 RBR Daily Epaper #99) and offered some choice words for the newspaper, the Post fired back with a story headlined "Sumner Disses Mel Again on Top Job." It claimed that by not mentioning Karmazin when saying that a succession plan for Viacom would be finalized in the near future, Redstone had stabbed his #2 in the back. The Post still insisted that Redstone is hot to buy Time Warner, despite his insistence that he won't do any stock merger while Viacom's stock is so low. RBR observation: This whole succession drama is much ado about very little. The bottom line is that Redstone owns voting control of Viacom. At 80, he's two decades older than Karmazin, but he could still be at the helm when Mel decides it's time to retire and enjoy life. But if Sumner is hit by a bus tomorrow, his heirs will own voting control of Viacom and daughter Shari will be free to do as she wishes (in consultation with her brother), just as Sumner does now. So if Sumner designates Mel as his CEO successor, that will only last as long as Shari is happy with the job he's doing. She will control the votes to replace top executives and board members at will, just as her father does now.

Measuring the Media Moguls

Journal Communications:
Steven Smith, Chairman & CEO

2003 stock performance: +23.53%
2003 CEO pay: +26.89%

After shepherding Journal Communications through its IPO last September, chairman & CEO Steven Smith received a bigger bonus in 2003 and saw his total pay rise 26.89% to $1,112,599. Meanwhile, shareholders who bought those newly-minted shares saw their value increase by 23.53% by the end of the year. | Full Story |

Adbiz ©

KMart and The WB tie marketing knot
Kmart and The WB announced an exclusive integrated marketing campaign to launch five new Kmart Back-To-School fall apparel collections and The WB's new season of shows. This marketing partnership is the first of its kind where a major retail brand is working with a television network to jointly leverage their respective assets for cross promotional purposes. | Full Story |

Seinfeld web ads air on NBC
The NY Post reports Jerry Seinfeld, the former Thursday king of NBC, returned as part of an unusual primetime promotion for American Express. The 10-minute promo ran from 8:42 p.m. to 8:52 p.m., starting with the television premiere of the "Seinfeld & Superman" series that premiered in March on americanexpress.com. The "web-i-sode" - titled "A Uniform Used to Mean Something" and running about four minutes - has Seinfeld and Superman (voiced by Patrick Warburton, "Seinfeld's" David Puddy) hanging out together in Manhattan. The promo has also been designed to generate excitement for the second web-i-sode, "Hindsight is 20/20," which will have Jerry and his pal Supe on a road trip. "Hindsight" premiered yesterday at noon on the Amex website.

Media, Markets & Money tm

Saga bursts into Ithaca, NY
Ed Christian is adding a new market to the operation at Saga Communications - - Ithaca, NY, Arbitron market #273. Saga will go in as the market's dominant player, buying a four-station cluster from Eagle Broadcasting - - WTKO-AM, WHCU-AM, WQNY-FM and WYXL-FM. Financial terms weren't immediately disclosed. Saga said it expects to close the transaction in Q4. "We could not ask for better stations to be our first acquisitions in the state of New York. We look forward to working with the existing staff to continue the great heritage that these stations have established. Saga intends to continue building its business in both the radio and television markets by identifying and acquiring middle market stations," said Christian in announcing the deal.

Washington Beat

Programming

Interep releases Winter 2004 format share analysis
Interep released the results of its Winter 2004 audience format share analysis, which shows that the Spanish and Hot AC formats soared to record levels in the Winter Arbitron Survey. The latest results represent continuing growth for the group of formats classified under the "Spanish" label -- topping the record set in the Fall 2003 report. Spanish shares are up nearly a full point in the past year. News/Talk remains the most listened to specific format classification; though, the combined News/Talk/Sports category is off slightly as the Sports segment gave back some of the extra listening generated last Fall. The format remains stable on a year-to-year basis. CHR remains the third ranked format category, with a slight shift from "Dance" into the "Pop" segment in the latest book. Urban held steady in fourth place overall, followed by Adult Contemporary. AC dropped back a bit after a Fall ratings surge. Winter results contained virtually no changes for Country, Classic Rock, Oldies, New Rock and Jazz. Finally, AOR rebounded a bit in the Winter book. After down-trending for a period of time as the Rock genre fragmented, the format seems to have reached a point of ratings equilibrium during the past year.

Transactions

$1.5M: WTPL-FM Manchester NH (Hillsboro NH) from Concord Broadcasting LLC to Great Eastern Radio LLC.

$1.15M: KBDD-FM Wichita KS (Winfield KS) from American Family Association to Family Worship Center Church Inc.

$850K: KDBV-AM Monterey-Salinas (Salinas CA) from Wolfhouse Radio Group Inc. to Centro Cristiano Vida Abundante Inc.

| Full Details |

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