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Volume 24, Issue 100, Jim Carnegie, Editor & Publisher
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Tuesday Morning May 22nd, 2007
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Radio News ®
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 Clear Channel goes mobile
Clear Channel Radio has launched customized mobile phone applications for five New York FM stations, the first in a nationwide rollout, allowing listeners to do such things as text message the studio and get alerts when their favorite song is going to be played. CC Radio plans to roll the mobile program out to more than 100 stations by the end of 2008. First up are CHR WHTZ-FM "Z100," Classic Rock WAXQ-FM, Rhythmic AC WKTU-FM, Urban WWPR-FM "Power 105.1" and AC WLTW-FM 106.7. Users of the new system will be able to send text messages into the studio, participate in contests, receive an alert before their favorite song plays, make requests and dedications, and view the last 10 songs played on their favorite station. The technology is available on most cellular phones via carriers that offer SMS text features. Cell phones with even basic SMS capabilities will be able to participate via text messaging, said Clear Channel, while more advanced phones will be able to access the servic4es via WAP and enjoy the applications with rich graphics and an enhanced user interface. Listeners can also sign up for alerts about breaking music news and tune-in times for in-studio performances, interviews and contests. Additionally, users can check current traffic conditions, test their knowledge with station specific trivia, and participate in opinion polls. Starting in July, cell phone users will also be able to customize their individual phones with station logos, DJ wallpaper, and format specific ring tones. "By making these applications available for free via any cellular phone carrier, Clear Channel Radio is monumentally expanding access to its growing mobile content portfolio," said CC Radio CEO John Hogan.
Both radio and TV up for Journal
April was a down month for the newspaper biz at Journal Communications, but up for Journal Broadcast Group. Radio revenues rose 4.3% to 6.57 million. On a same station basis, excluding two stations which were sold in the past year, radio revenues were up 6.5%. The company didn't offer any details for the month, but Journal has been successful over the past several quarters in building revenues at its developmental radio stations. For television, revenues rose 1.5% to 10.86 million, apparently replacing all political revenues from the previous year - and then some. For Journal Broadcast Group in total, revenues were up 2.5% to 17.42 million. Meanwhile, publishing revenues were down 6.8% to 23.84 million, with ad revenues down 9.1% to 17.06 million. Both the flagship Milwaukee Journal Sentinel and the company's community newspapers and shoppers posted ad revenue declines.
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April expected to be so-so
After a disappointing 2% decline in March (5/17/07 RBR #97), radio revenues are expected to be back in the plus column for April - but not by much. Both Jim Boyle at CL King and Jonathan Jacoby at Bank of America are out with research notes to investors predicting that April will be up 1%. "A trend reversal? No, just much easier comps," explained Boyle. "Radio's top-line likely will be flattish in Q2 and the comps only get more difficult as the year progresses," warned Jacoby.
 Pope expresses content discontent
Broadcasters and other media have been hearing it from watchdogs and government entities, especially since Janet Jackson helped turn up the heat back in 2004. Now Pope Benedict XVI is getting in on the act. "Any trend to produce programs and products - including animated films and video games - which in the name of entertainment exalt violence and portray anti-social behavior or the trivialization of human sexuality is a perversion, and the more repulsive when these programs are directed at children and adolescents," he said, according to Catholic Online. Benedict said the influence of media is great. "Indeed, some claim that the formative influence of the media rivals that of the school, the church and maybe even the home." He asked the media to "Safeguard the common good, to uphold the truth, to protect individual human dignity and promote respect for the needs of the family." Benedict did not seem to call for any sort of regulatory remedy, however, and acknowledged that there is a place in the culture for popular media. He did stress that parents have the key role in mediating between the media and their own children. "They have a right and a duty," he said, "to ensure the prudent use of the media by training the conscience of their children to express sound and objective judgments which will then guide them in choosing or rejecting programs available."
RBR observation: The last comment comes close to echoing comments made by free speech advocates here in the US, who note that in many cases thoughtful parents may wish to expose their children to what may be borderline or even objectionable programming to some, in order to discuss and teach. We personally would worry about a child who suddenly comes into contact with the "real" world all of a sudden when they turn 18 or spend any appreciable amount of time away from home for the first time. But that is a matter for parents, not the government, and we would say that Benedict's call for parental discretion rather than government intervention is spot on.
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WSJ point-counterpoints violence
The Wall Street Journal asked if the FCC should be given the power to tame the violence contained in broadcast programming, but it didn't ask just anybody. It pitted former FCC Commissioner Gloria Tristani against "Law & Order" Executive Producer Rene Balcer in a debate, with Tristani in favor of applying curbs and Balcer advocating that the government stay out of content regulation. The duo was able to agree on a key point, that although there have been studies that vaguely link broadcast violence and aggressive behavior, there is no study - period - which shows broadcast violence as a cause. Another point of agreement was the difficulty of defining violence. Balcer pointed out that the FCC didn't even make an attempt in its recent report to Congress. Tristani said that difficulty should not bar an attempt, however, and suggested a couple of possibilities including the often-cited SCOTUS judge Potter Stewart "I know it when I see it" standard often applied to pornography. Balcer batted this away, since there would have to be exceptions for news and sports programming, as well as the gigantic loophole of artistic merit. He suggested that just because technology like the V-Chip seems to be difficult for parents to use shouldn't bar that as the method of choice for empowering parents without regulating content.
RBR observation: We've been thinking about this. Sure, we see violence on the news just about every night, a reminder that there is real violence happening around us. But as we are out and about in our very average community, where Nielsen tells us most people are watching the media's current programming lineup which is supposedly saturated with violence and indecency, we rarely ever see the slightest indication of either tendency. And it's not just the suburbs - we worked and lived in a major US city not so long ago, and we didn't see violence or in, decency on the streets there either with any kind of frequency. So where is the evidence that the media is turning us all nuts?
 Florida's leap forward is problematical
As expected, the state of Florida has moved its primary ahead of most of the pack, scheduling events for both Democrats and Republicans on 1/29/08. That would put it a week ahead of the rapidly growing Super Duper Tuesday mega-event on 2/5/08. An early Florida campaign is seen as a costly proposition for candidates, with its wide geography and plethora of separate and distinct media markets. However, the parties seem to see this as butting in line, and have sanctions in place which could prove costly to the state's party organizations. The stronger sanctions are on the Democratic side. Florida could be penalized by losing half of its convention seats and all of its super-delegates (generally members of Congress). And any candidate who actually campaigns there could lose all delegates won. The Republican side also has a 50% delegate loss sanction in place. According to cbs4.com, a compromise may be negotiated under which an alternate delegate selection process is adopted and occurs no earlier than 2/5/08, with the 1/29/08 vote treated as a straw poll.
RBR observation: In short, at the moment this situation is a mess. If the national parties hold their ground, Florida's attempt to increase its relevance may actually have the opposite effect. And if votes for a candidate are not counted as punishment for campaigning in a non-sanctioned event, they'd be crazy to spend any money in the state. Stay tuned.
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Ad Business Report TM
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 Wireless phone business
may be heating up
One strong ad category for broadcasters that tends to come in waves of intensity may be heating up again - wireless telephony. New money is jumping into the sector and an existing big player has reason to increase its marketing efforts. TPC Capital and GS Capital Partners (the GS is Goldman Sachs) have announced an agreement to buy out public shareholders of Alltel for 71.50 per share, a total of 27.5 billion. Alltel CEO Scott Ford will remain in his role as the company goes private, with a shareholder vote on the buyout expected later this year. Meanwhile, AT&T has accelerated its rebranding of the former Cingular wireless service to AT&T. The AT&T brand has now replaced the orange "Jack" character and the Cingular name on all in-store signage, store kiosks and point-of-sale materials at all 1,800 company-owned wireless retail stores. It will take a little longer to change all of the outside signage, but AT&T saw to it that new signs were put up outside at key stores in major markets. Exteriors of most company-owned retail locations are expected to be branded as AT&T by September, with branding of agent-owned retail stores expected to be completed by January 2008. AT&T says the store makeovers are critical to prepare for the late-June launch of the Apple iPhone, for which AT&T will be the exclusive wireless provider in the US. In terms of advertising, TV, radio and outdoor ads now incorporate transitional elements related to the AT&T and the Cingular brands, but AT&T is featured much more prominently. The transitional phrase, "Wireless from AT&T, formerly Cingular," has begun replacing the phrase, "Cingular is now the new AT&T," but the color orange will continue to be associated with wireless services from AT&T. The "Jack" mark will be used in a less prominent way in advertising and customer collateral.
RBR observation: With private equity taking over the #5 wireless phone company, look for increased marketing as Alltel tries to increase its market share. We doubt that the new owners will be content with that fifth place standing and will want to build on the current subscriber base of 12 million. After all, they paid a 23% premium over the recent stock price to buy out the public shareholders. As for AT&T, it figures synergies from combining BellSouth and Cingular under AT&T will produce 2.8 billion in value. But to realize that value, they are going to have to keep customers of all three happy - and add new customers. That means advertising now, plus a big kickoff for the apple iPhone. And if both AT&T and Alltel step up their advertising to try to increase their wireless phone market share, any competitor who doesn't respond with their own advertising ramp-up is going to be left in the dust.
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| Media Business Report TM |
Squeeze coming in business mag business?
A new player with a strong publisher is entered the fray of business magazines aimed at the general marketplace (as opposed to B2B) - Conde Nast Portfolio (CNP) is the title, and Advertising Age has taken a look at the likely affect it will have on the marketplace. AA says there is a lot of speculation that the new entrant will put a hit on "old guard" titles including BusinessWeek, Forbes and Fortune. For starters, AA notes that the sector may be further compromised by the shift of attention to the internet and the prospect of a new News Corporation business cable channel. But a shake-out may be coming to the business mag universe with or without CNP, and the likely victims are not the old warhorses, but new upstarts - AA mentions Smart Money, Money, Fast Company and Business 2.0. The smaller titles are already facing a challenging economic climate for magazines of any type, regardless of the presence of new competition, and this will only make things more challenging. AA feels the old-timers have a much better chance of weathering the storm, while publishers of the newer titles will be increasingly tempted to pull the plug and place their bets elsewhere.
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| Media Markets & Money TM |
Go fly a KOIT
When Bonneville International swapped its three San Francisco FMs to Entercom earlier this year, we all knew its was just a matter of time before its orphaned KOIT-AM was spun off. That event has finally taken place, with the station going to non-profit IHR Educational Broadcasting. As in the Entercom deal, brokerage Star Media was involved on behalf of Bonneville, and The Exline Company assisted IHR, headed by Douglas M. Sherman. The price is 14M cash. An LMA kicks in 6/1/07. IHR will also need to find a new set of call letters. IHR has full power stations and CPs in California, Nevada, New Mexico, Oregon and Montana.
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| Washington Media Business Report TM |
 All POTUS, all the time
XM Satellite Radio is teaming up with cable stalwart C-CPAN to provide a 24/7 channel dedicated entirely to the 2008 presidential campaign. It will be commercial-free and free-to-air, meaning it will be available on all XM receivers whether or not the owner subscribes to the service. Programming will include "news updates, candidate interviews, complete speeches, debate coverage, latest polling results, fundraising status, and live call-in shows." Candidates will receive free airtime, content from bloggers and podcasters will be solicited, and C-SPAN will provide historical features. The service will preview in June with debate content, will formally kick off in September this year and will run through November 2008.
Illinois delegation goes to bat for Tribune
A bipartisan group of US legislators representing the state of Illinois have fired off a letter to FCC Chairman Kevin Martin on behalf of hometown teammate Tribune Company. It simply asks that cross-ownership waivers in place to protect the company's TV/newspaper (and in one case, TV/newspaper/radio) combinations be allowed to go forward during its current ownership transaction, pending FCC action on its review of the rules. The FCC review has been in progress since 2002. The letter asks for expeditious action on the FCC's part given that there is no end in sight to the rulemaking process. 13 members of the House of Representatives in signing the letter joined Sen. Dick Durbin (D). Four are Democrats, and of the nine Republicans, the most prominent is former Speaker Dennis Hastert.
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| Entertainment Media Business Report TM |
 Surprise buyer for EMI Group
Private equity group Terra Firma is the surprise buyer of EMI Group, scooping up the London-based record giant for around 4.7 billion bucks in cash. EMI called the winning bid "fair and reasonable," but some speculators are still hoping for a topper - although it appears that long-spurned suitor Warner Music Group was outbid by Terra Firma. According to the London Times, Terra Firma entered the bidding only about 10 days ago, but moved aggressively to bid 265 pence per share. Warner Music Group is said to have held firm to its previous bid of 260. Even after the EMI board announced acceptance of the Terra Firma offer, the stock price went up to 271, so someone apparently thinks the bidding is not yet over. Just where a higher bid would come from remains to be seen, since the auction conducted by EMI's board had reportedly attracted three other bidders in addition to Terra Firma and Warner Music Group.
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| Transactions |
139M KEAN-FM/KEYJ-FM/KFGL-FM/KSLI-AM/KULL-FM/KYYW-AM Abilene TX; KATP-FM/KIXZ-AM/KMML-FM/KMXJ-FM/KPRF-FM Amarillo TX; KLAW-FM/KVRW-FM/KZCD-FM Lawton OK; KFMX-FM/KFYO-AM/KKAM-AM/KQBR-FM/KZII-FM & KKCL-FM Lubbock TX (Lubbock, Lorenzo TX); KYKS-FM, KSFA-AM/KTBQ-FM & KAFX-FM Lufkin-Nacogdoches TX (Lufkin, Nacogdoches, Diboll TX); KMRK-FM, KCHX-FM/KCRS-AM/KCRS-FM & KFZX-FM Odessa-Midland TX (Odessa, Midland, Gardendale TX); KEEL-AM/KXKS-FM/KRUF-FM/KVKI-FM/KWKH-FM & KTUX-FM Shreveport LA (Shreveport LA, Carthage TX); KKYR-FM, KPWW-FM, KOSY-AM/KYGL-FM & KMJI-FM Texarkana TX-AR (Texarkana, Hooks TX, Texarkana, Ashdown AR); KNUE-FM/KTYL-FM, KKTX-FM/KBGE-AM & KISX-FM Tyler-Longview TX (Tyler, Kilgore, Whitehouse TX); KIXS-FM/KQVT-FM & KLUB-FM Victoria TX (Victoria, Bloomington TX); and KBZS-FM/KNIN-FM/KWFS AM & FM Wichita Falls TX from Various subsidiaries of Clear Channel Broadcasting Inc. (Mark Mays) to GAP Broadcasting LLC (George Laughlin). 13.9M escrow, balance in cash at closing. Existing superduopolies in all 11 markets. LMA until closing. [File date 4/30/07.]
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| Stock Talk |
A mixed day, but a record falls
The S&P 500, which is a broad measure of stock market strength, closed at a record high on Monday, but that milestone was muted by the failure of the blue chip barometer, the Dow Industrials, to advance as well. The Dow ended the day down 14 points at 13,543.
Radio stocks were higher. The Radio Index rose 2.288, or 1.4%, to 162.830. Entercom and Citadel led the charge, each up 3.8%.
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| Radio Stocks |
Here's how stocks fared on Monday
| Company |
Symbol |
Close |
Change |
Company |
Symbol |
Close |
Change |
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Arbitron
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ARB
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50.51
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+0.89
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Hearst-Argyle
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HTV
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26.00
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+0.15
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Beasley
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BBGI
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8.98
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unch
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Journal Comm.
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JRN
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13.82
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+0.08
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| CBS CI. B |
CBS |
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32.84
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+0.29
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Lincoln Natl.
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LNC
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73.77
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-0.23
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| CBS CI. A |
CBSa |
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32.86
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+0.30
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Radio One, Cl. A
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ROIA
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7.52
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+0.14
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| Citadel |
CDL |
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8.67 |
+0.32 |
Radio One, Cl. D
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ROIAK
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7.49
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+0.09
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Clear Channel
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CCU
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38.05
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-0.18
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Regent
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RGCI
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3.38
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+0.05
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Cox Radio
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CXR
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15.21
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-0.10
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Saga Commun.
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SGA
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9.57
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+0.08
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Cumulus
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CMLS
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9.56
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+0.11
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Salem Comm.
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SALM
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12.32
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+0.35
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Disney
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DIS
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36.44
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+0.42
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Sirius Sat. Radio
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SIRI
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2.79
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+0.06
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Emmis
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EMMS
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10.84
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+0.08
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Spanish Bcg.
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SBSA
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4.44
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+0.21
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| Entercom |
ETM
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27.97
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+1.01
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SWMX
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SMWX
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0.25
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unch
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Entravision
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EVC
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9.55
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unch
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Westwood One
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WON
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7.59
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+0.20
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Fisher
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FSCI
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49.70
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+0.42
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XM Sat. Radio
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XMSR
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11.14
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+0.28
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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
Wireless phone business
May be heating up, 1 strong ad category that tends to come in waves...
Media Business Report
Squeeze coming
In business mag business? New player with strong publisher is entered fray...
Media Markets & Money
Go fly a KOIT
Going to non-profit IHR Educational...
Washington Media Business Report
All POTUS, all the time
XM Satellite Radio is teaming up with cable stalwart C-CPAN...
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Stations for Sale
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 Market your Stations For Sale
in our daily epapers.
Contact
June Barnes
[email protected]
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Radio Media Moves
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Bohannon renewed
Westwood One announced today that a new multi-year agreement has been reached with Jim Bohannon to continue hosting "The Jim Bohannon Show" and "America In The Morning." The Jim Bohannon Show airs on 308 radio stations nationwide Monday through Friday, 10 pm to 1 am ET and America in the Morning airs on 339 stations nationwide.
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More News Headlines
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Satellite problems
for XM
The company was mum about what happened, but Internet blogs were buzzing after one of the XM Satellite Radio orbiting satellites went on the fritz yesterday, leaving a large section of the country without service. Kinda like a tower going down, except that you can't call for a climbing crew to fix it.
KFC goes surfing to find commercial stars
"The Bucket's Back." That's the theme of the latest round of commercials from Kentucky Fried Chicken, and what's brought it back is the abandonment of trans fat. An 0:15-second spot trumpeting this fact is headed for television, and the message is that America is celebrating this new development. In fact, it will be average Americans doing the celebrating. The ad will feature excerpts from 13 different videos from ordinary citizens that have been posted online. According to USA Today, KFC found 35 separate celebration videos it liked and got permission from the creators, and filtered that down to the 13 actually being used for the commercial. Draftfcb developed the spot, and its going to debut tonight on American Idol. One of the featured viral stars in Kelly Brinson, who happens to be a frequent and unsuccessful Idol auditioner. Draftfcb Chicago's Tom O'Keefe said, "The KFC brand itself is a genuine real-people kind of brand so using consumer generated content just made sense." And as USA today noted, it's a lot cheaper than using professional talent.
Cosmetics company targets Latinas
Steel Advertising & Interactive announced that it has been retained as the US advertising agency for La Matadora Cosmetics. Steel will work with La Matadora Cosmetics to develop a solid strategic marketing initiative and online presence to help build and extend the La Matadora brand to Latina women in the United States. La Matadora has created a skincare and beauty line targeted specifically for Latina women. The company has been around for three years and is currently only available in Spain.
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RBR Radar 2007
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Radio News you won't read any where else. RBR--First, Accurate, and Independently Owned.
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CCU board endorses boosted bid;
Vote delayed
If you've booked airfare to San Antonio to vote on the Clear Channel buyout, you'll have plenty of time to stroll the River Walk and enjoy some quality Tex-Mex cuisine. There will still be CCU's annual shareholders meeting, to reelect board members, certify the outside auditors and such, but the buyout vote is on hold. For the second time, an increase in the offer from Thomas H. Lee Partners, Bain Capital and the Mays family has been endorsed by the CCU board of directors. The latest increase was only 20 cents, to 39.20 per share.
RBR observation: The stock instead of cash option is capped at 30% of the new Clear Channel. We would expect it to be oversubscribed, so the issuance of new stock to current shareholders who want it will be on a pro rata basis. Still, Highfields, Fidelity and other big shareholders who really don't want to cash out will be able to convert most of their holdings to shares of the new Clear Channel. That means they will still be on hand to pressure Mark and Randall Mays to increase returns to shareholders. RBR just speculating that once this transaction is completed there will be some serious slicing and dicing. Especially a few non-hard core assets.
05/21/07 RBR #99
Line forms for the auction block:
LIN also for sale
LIN Television's stock was up 3.7% on Thursday, 5/24, as speculators bet that it would soon follow Nexstar in putting itself up for sale. Sure enough, at mid-day Friday 5/25 LIN announced that its board had retained J.P. Morgan Securities to help it explore "strategic alternatives."
TVBR observation: As with Nexstar, we see private equity players as the most likely buyer for LIN. For two billion plus, including debt, the buyer will get a top-performing local TV platform with most of its 29 stations in markets 25-71 - only four are in markets 100+. Thrown in for good measure is a 20% stake in a joint venture with NBC Universal which owns and operates the NBC stations in Dallas and San Diego.
05/21/07 TVBR #99
A peak at the Nexstar portfolio
The company that Perry Sook and his team built - and have now put up for sale - is substantial. It includes stations in 29 markets, including duopolies (actual or virtual) or tri-opolies in 17 of them. The company reported 265.2 million in revenues for 2006 and broadcast cash flow of 103.1 million, so it is easy to figure that the bidding will start north of a billion bucks.
TVBR note: Here is a look at the Nexstar portfolio. View the List prepared by TVBR.
05/21/07 TVBR #99
Radio One spins 10 to Main Line
Wall Street has been expecting for some time now that Radio One would sell off some of its non-core properties - and now the company is selling 10 stations in two markets. The buyer is Dan Savadove's Main Line Broadcasting, which will acquire the Radio One clusters in Louisville, KY and Dayton, OH. That will boost recently launched Main Line to 19 stations in four markets. (for complete station list see RBR)
05/18/07 RBR #98
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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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