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Volume 22, Issue 101, Jim Carnegie, Editor & Publisher
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Monday Morning May 23rd, 2005
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Radio News®
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Is deconsolidation just part of a cycle?
That's the theory put forth by Thomas Weisel Partners analyst Gordon Hodge in a research note on the current wave of media companies spinning off units or selling assets. "Attractive cash flow characteristics, changes in regulation (swinging from more to less and back again) and disruption from new technologies drives a seemingly perpetual spin cycle of deals within the media industry. After a boom-bust consolidation period in the late 1980s, the Telecom Act of 1996 propagated another consolidation wave, which rolled through the Internet bubble and then crashed into the breakers of recession, antitrust concerns and 9/11. We are living in the aftermath of that wave," Hodge told clients. In his view, many media companies now have their stocks trading at a discount to the value of their parts, so it makes sense that Viacom, Clear Channel and others are trying to unlock value by separating those parts. That offers opportunities for investors who are able to identify the companies with the most undervalued assets. In his view, the most attractive candidates are Time Warner, Univision, Entravision and Viacom, while he says that Clear Channel and Disney are actually trading right around the sum of their parts.
RBR observation: Reminds us of a Yogi Berra quote on his hitting, "Slump? I ain't in no slump ... I just ain't hitting." Well same with many companies they just ain't hitting because as Berra would say - "90% of the game is half mental." Think about it because Hodge and Berra are both correct either a slump of the sum of their parts. Key for all media companies is your business plan and execution of the plan. If you didn't see it coming after 9/11 and the '02 recession which is still alive then you best get your house in order now or you will find it very difficult to compete in 2006.
Live at 6AM: A NYC F-bomb
Banished-to-satellite radio bad boys Opie & Anthony have claimed a scalp from the ranks of New York City media via their unofficial minions. O&A fans were harassing Channel 2 WCBS reporter Arthur Chi'en while he was doing a live news report for the station's 6AM newscast. The bomb was dropped afterward, when Chi'en thought the transmission was over. It wasn't. Chi'en turned around and said, "What the [f-bomb] is your problem, man?" It went out over the airwaves, and shortly thereafter, Chi'en was out on the street, out of a job.
RBR observation: This is exactly the sort of fleeting and accidental use of the f-bomb which the FCC considered non-actionable back when a similar one was delivered by Bono at the Golden Globes. Since then, the FCC's statements on F-bombs have been anything but consistent - - however, you'd think that the station's rawpid apology and personnel action will keep it in the clear. However, Chi'en's outburst clearly an accident. It is unfortunate that the chill in the air over broadcast decency can turn a fleeting, split-second error into at best a career disruption and at worst a career termination. We think CBS should bring Chi'en back on board. He was clearly being harassed by the O&A fans, if you saw the clip.
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Beck may want less of Moore, but not that much less
According to reports, Clear Channel Talker Glenn Beck said remarks he made about choking filmmaker Michael Moore were quoted on the Media Matters for America website completely out of context. He said the remarks were made in jest, a fact he felt was abundantly clear to anyone who heard the entire broadcast. Beck said the bit was about what he would and would not do for 50M dollars. There were a few things he wouldn't do. He said he would not cheat on his wife, nor would he commit murder. The comedy came when he hedged, and said well maybe he would murder Moore for 50M, or even for only 10M. The FCC does have a rule against making threats over the airwaves: "SEC. 502. OBSCENE OR HARASSING USE OF TELECOMMUNICATIONSFACILITIES UNDER THE COMMUNICATIONS ACT OF 1934. Section 223 (47 U.S.C. 223) is amended - - (1) by striking subsection (a) and inserting in lieu thereof: (a) Whoever - - (1) in interstate or foreign communications - - ``(A) by means of a telecommunications device knowingly - - (i) makes, creates, or solicits, and (ii) initiates the transmission of any comment, request, suggestion, proposal, image, or other communication which is obscene, lewd, lascivious, filthy, or indecent, with intent to annoy, abuse, threaten, or harass another person;..."
Groups ready issue ad flights
The ongoing political wars have many on the sidelines who want to more than just cheer for their cause and their cause's standard bearers. They want to put pressure on and enlist more politicians to their side. It all helps keep the political category alive during an off-election year. The American Federation of Teachers is one of them - - it's going after No Child Left Behind. It says gross underfunding is only the beginning of corrections needed for the program, and it's going the grassroots route with radio and print to drive its points home, with radio ads pegged for Washington, Philadelphia, Miami, Chicago, Dallas, Cleveland, Detroit, Los Angeles, Albuquerque and other cities. Some of these locations will have Spanish as well as English versions. Conservative Progress for America is going on the air in support of one President George W. Bush's judicial candidates - - Priscilla Owens. The ad focuses on her accomplishments and calls for an end to the four-year filibuster mounted by Democrats opposed to her potential seat on the Fifth Circuit bench. Locales were not mentioned by the group, which however said it was launching an "ad blitz," so it may well be coming to a market near or including you.
OneDomain sued for copyright infringement
Tapscan claims in a federal lawsuit that Birmingham competitor OneDomain Inc. infringed on its copyrighted computer code that runs software products for broadcasters, reported The Birmingham, AL News. Tapscan, a subsidiary of Marketron, filed the suit in U.S. District Court in the Southern District of NY. It seeks monetary damages and an order banning "reproducing and distributing the Tapscan Code in various software products."
RBR observation: We are in the techie age and no going back and what Tapscan is claiming we will see more of - companies protecting their names and their established brands along with intellectual property because people in general are more computer and internet literate. Do a simple engine search and see if a brand is being used because there are rules to follow and the first being common sense. Nobody today can claim ignorance and say - DA I didn't know. Sorry, doesn't cut it. | More... |
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Adbiz©
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ABC scores early in the upfront
ABC Sales President Mike Shaw, riding on a wave of ratings upswings and powerful fall programming, has already negotiated a few big upfront deals last week with OMD that included primetime, other dayparts, and a Super Bowl buy. ABC reportedly did the deal at a 6% CPM hike for primetime. This was just days the net's 5/16 presentation in NYC.
First the eyes go, then the ads
Video games compete with traditional programming for the television screen, especially in homes with young males in residence. Marketers are taking that fact to heart, and are starting to put their money in those games. According to the Associated Press, a number of companies have found a home in "True Crimes: Streets of LA." A crime involves Puma clothing and the main character uses a Motorola handset complete with a GPS unit. In another game (online), "Everquest II," players encounter a functional Pizza Hut icon which they can use to order a pizza for 30-minute delivery without ever leaving the confines of the game. In-game advertising is predicted to be a 1B category by the end of the decade.
EBay TV to launch on Time Warner Cable TV
Struck a deal to let cable customers make Internet bids through their TVs. Time Warner Cable digital subscribers in the Austin will take part in a one-year test of new technology. Viewers in Austin will be able to click their remotes to view the status of eBay bids they made on their computers. Users can set the software to alert them on their TV screens if they are outbid, and can then use their remotes to raise their bids. TWC is already testing similar applications that let viewers tailor interactive menus to access local weather, news, stock prices and sports team scores from their TV sets in four markets including Portland, Maine and San Antonio.
RBR observation: Called consumer interaction with that TV screen. Getting they away from the computer screen to the TV screen is excellent in positioning and branding. TV screen is fighting the computer screen and soon VOD screens. The more you can keep them in front of that TV better all TV will be for today and tomorrow.
Reif Cohen:
broadcast upfront to hit 9.1 billion
Primetime broadcast TV will only achieve modest if any gains overall in the new upfront, according to Merrill Lynch analyst Jessica Reif Cohen. In a report released last week, Reif Cohen said primetime broadcast's increase will be up about 2% to 9.1 billion. Strong ratings for CBS and ABC likely will translate into double-digit gains for both nets; ABC is estimated to take in 1.51 billion, up 21% from a year ago. Fox is estimated up 2% to 1.53 billion; NBC down 14% to 2.41 billion; and CBS up 10% to 2.59 billion.
No billboards in space
The government doesn't want billboards in space. The FAA proposed last week to amend its regulations to ensure that it can enforce a law that prohibits "obtrusive" advertising in zero gravity. "Objects placed in orbit, if large enough, could be seen by people around the world for long periods of time," the FAA said in a regulatory filing. Currently, the FAA lacks the authority to enforce the existing law. For instance, outsized billboards deployed by a space company into low Earth orbit could appear as large as the moon and be seen without a telescope, the FAA said. Big and bright ads might hinder astronomers. "Large advertisements could destroy the darkness of the night sky," regulators said.
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Media Markets & MoneyTM |
Dame Broadcasting exits Hagerstown
Dan Savadove's Main Line Broadcasting will be the beneficiary of Al Dame's decision to part with his radio stations in the Hagerstown MD-Chambersburg-Waynesboro PA market. Main Line will come into being with an intact five station cluster in its portfolio. According to Michael J. Bergner, who handled brokerage chores, the deal is worth 22.5M. The stations include WIKZ-FM, WQCM-FM, WDLD-FM, WHAG-AM & WCHA-AM.
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Washington Beat |
More Auction 37 FMs waved ahead
22 FM allotments have been cleared to approach the runway to construction by the FCC. All of them are going to winning bidders in last fall's Auction No. 47. Once the bidders get their financial houses in order they are free to begin filing for the actual CPs. The deadline is D-Day, as it turns out - - 6/6/05, with a grace period lasting until 6/20/05. The biggest names on the latest list are Citicasters, a name often used by Clear Channel, and Cumulus, with a stick apiece. College Creek and Radioactive both had four. Here's the complete list: Absolute Communications (Sibley IA); Advance Acquisition (Fort Benton MT); Citicasters (Chehalis WA); College Creek Broadcasting (Belt MT, Choteau MT, Fairfield MT, Wellington UT); Cumulus (St. Paul AR); Kona Coast Radio (Wahiawa HI); NT Radio (Condon OR); Pacific Empire Radio (Troy ID); Radio Layne (King Salmon AK); Radioactive (Crystal Falls MI, Gwinn MI, Old Forge NY, Saranac Lake NY); David L. Smith (McMillan MI); Southwest Broadcasting (Tylertown MS); Patricia Van Zandt (Fredonia KY); and World Radio Link (Eureka MT, Saint Regis MT, Prineville OR)
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Sales & Marketing |
RAB wants to clear up misunderstandings about radio
The RAB has identified eight issues about radio it says are misunderstood, exaggerated or underestimated. It sent journalists covering the industry a reference guide and data to support its arguments. We think it may be a good tool for sales as well. | View & Print Major Myths |
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Monday Morning Makers & Shakers |
Transactions: 4/11/05-4/15/05
A merger between two Midwestern small market radio groups and an Amarillo TV deal joined a number of other smaller deals, finally melting the iceberg that was holding radio trading in check - - the three big deals fueled a surge that just barely missed clearing into three-digit territory.
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Total
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Total Deals
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17
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AMs
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27
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FMs
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44
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TVs
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2
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Value |
99.765M
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| Complete Charts |
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Radio Transactions of the Week
Two groups combine into one
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TV Transactions of the Week
Texas two step slides into New Mexico
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Transactions |
95M KEAR-FM San Francisco from Family Stations Inc. (Harold Camping) to Infinity Radio Inc., a subsidiary of Viacom Inc. (Sumner Redstone). Cash. Superduopoly with KCBS-AM, KLLC-FM, KFRC AM & FM, KYCY-FM & KITS-FM. Crossownership with KBHK-TV, KPIX-TV. Buyer has said it will spin off KBAY-FM and KEZR-FM in the embedded San Jose market. LMA until closing. [File date 4/19/05.]
445K WELY AM & FM Ely N from Boundary Waters Broadcsters Inc. (Janice Erickson) to Bois Forte Tribal Council (Kevin W. Keecy, David C. Morrison, Gordon Adams Jr., Kevin Strong, Ray Villebrun Sr.). 22.5K escrow, balance in cash at closing. [File date 4/20/05.]
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Stock Talk |
Nickel and diming the stocks
Anyone who says "it doesn't make a dime's worth of difference" wasn't talking about the fate of broadcast issues last Friday. The vast majority of them were within a dime of the day's starting point, one way or the other. There were a few exceptions - - stocks which approached a half dollar one way or the other, mostly on the television side. But for the most part, the day ended much like it began.
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Radio Stocks |
Here's how stocks fared on Friday
Company |
Symbol |
Close |
Change |
Company |
Symbol |
Close |
Change |
Arbitron
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ARB
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41.09
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-0.08
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Jeff-Pilot
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JP
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49.30
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-0.35
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Beasley
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BBGI
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17.15
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-0.05
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Journal Comm.
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JRN
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16.56
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+0.08
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Citadel |
CDL |
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12.01 |
+0.15 |
Radio One, Cl. A
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ROIA
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12.56
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+0.10
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Clear Channel
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CCU
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30.64
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+0.06
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Radio One, Cl. D
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ROIAK
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12.58
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+0.08
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Cox Radio
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CXR
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16.24
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-0.01
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Regent
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RGCI
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5.92
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-0.07
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Cumulus
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CMLS
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12.34
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-0.10
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Saga Commun.
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SGA
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14.08
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+0.05
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Disney
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DIS
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27.89
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-0.05
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Salem Comm.
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SALM
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17.58
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+0.47
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Emmis
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EMMS
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17.82
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-0.08
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Sirius Sat. Radio
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SIRI
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5.64
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+0.25
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Entercom |
ETM
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32.83
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+0.13
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Spanish Bcg.
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SBSA
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8.35
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+0.02
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Entravision
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EVC
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7.49
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-0.12
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Univision
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UVN
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26.67
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-0.13
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Fisher
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FSCI
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50.52
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-0.48
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Viacom, Cl. A
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VIA
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35.05
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+0.39
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Gaylord
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GET
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42.19
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+0.02
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Viacom, Cl. B
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VIAb
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34.97
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+0.47
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Hearst-Argyle
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HTV
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24.96
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-0.02
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Westwood One
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WON
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19.99
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+0.06
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Interep
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IREP
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0.48
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unch
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XM Sat. Radio
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XMSR
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31.54
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+1.54
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International Bcg.
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IBCS
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0.01
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unch
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-
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-
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- |
-
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-
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Bounceback
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We want to
hear from you.
This is your column, so send your comments to [email protected]
In defense of Interep...
Recent reporting on Interep has centered on comments made by major radio groups. Our two-station, family-owned group in Chattanooga is probably one of Interep's smallest clients. In the five years we have been represented by Interep's D&R Radio Sales, they have consistently out-performed the market and delivered power ratios well in excess of 100, no small feat for an Urban combo. Am I alone in noticing that when stations or groups are under-performing, their first action is often to throw their national rep firm under the bus?
Brad Guagnini
Brewer Broadcasting
Chattanooga
On Newsweek and responsibility...
Good common sense should have prevailed before they ran that news story. Whether or not it was true, had someone thought for 15 minutes before they allowed this into print, they would have realized the inflammatory issue was more important than printing the story. We are already the "cowboys" of the world, and Newsweek, to sell magazines, put American lives at stake... innocent lives, who travel around the world. Newsweek showed just how inept they are at being responsible for their actions. Free speech... certainly... but they do not have to print everything they hear, and especially if national security can be affected. Those who died in the riots where victims of Newsweek's stupidity.
Shari Greer
Account Executive
Total Traffic Networks
Houston, TX
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Upped & Tapped
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Infinity/Chicago
ups Bowen
Infinity has promoted WBBM-AM SM Peter Bowen to Director of Sales for the entire Chicago cluster. Bowen takes over the title from Paul Agase, who remains GM of WSCR-AM there.
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Competing Media
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Time Warner
may spin AOL
Time Warner may consider spinning off AOL in the future to help finance acquisitions, CEO Richard Parsons told investors at the company's annual meeting in NYC last week. Time Warner has discussed with management of AOL the possibility of selling shares of the unit in an initial public offering and decided not to go ahead with such a plan "at this point," said Parsons. The likelihood of a spinoff probably depends on whether AOL CEO Jonathan Miller succeeds in his strategy of attracting more Internet users and advertisers to his service to compensate for the decline in dial-up subscribers. AOL's 112 billion purchase of Time Warner in January 2001 led to a record 98.7 billion loss in 2002 and caused the shares to tumble.
RBR observation: A good idea. AOL still hasn't realized its main client base is dial-up. When Juno and Netzero came along with basically the same core service at less than half the price, AOL should have immediately matched those 9.95 a month fees to keep its customers from leaving. It didn't. Instead, it bought Netscape and made a Netscape service for 9.95-too little too late. What it should have done is offered the AOL service for 9.95 a month and touted its extra benefits/services. But AOL ad sales are showing some real promise lately, so we will see what happens.
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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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Susquehanna thumbs up to Interep, But they are for sale
Another satisfied customer has stepped forward to counter the bashing that Interep has gotten from some quarters in recent weeks. In his quarterly conference call, Susquehanna Media CEO David Kennedy noted that an 11% improvement in national sales was included in Susquehanna Radio's 4% revenue gain in Q1, with local up 2%. As you'd expect, there were questions about the plan to auction off Susquehanna's radio and cable properties, along with i! ts parent company's pottery operation. But Kennedy said there was nothing new to report - - that the company's investment bankers are still putting together information to send out to potential bidders. He also refused to comment on Q2 pacings, since Susquehanna never gives out any forward guidance. RBR observation: Take the pat on the back when you can because the old saying "What did you do for me today applies' as this will be short lived once Susquehanna is sold off and then - who will rep the stations as Susquehanna will not remain status quo. Interep become a media firm and stop being just a radio rep as not much future running a rep as is was 50 years ago. 05/20/05 RBR #100
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GSM Opportunity with Emmis
Legendary KSHE-95 St Louis needs a strong GSM with minimum 5 years battle experience and NTR skills a plus. Generous benefits and compensation await. Are you ready for this challenge!
General Manager
On the NJ Shore with at least five years suburban market and cluster exp. Strong sales but programming and engineering knowledge a plus. Excellent benefits including 401(k).
Broker Opportunity
Established in 1979, conducted over 1 billion in transactions seeking just one exec that desires to learn and become a player in the investment media station brokerage business. First quality in our firm is integrity.
Sales Position
We're expanding our sales force to spread the word about MusicMaster for Windows music scheduling software. Self-starters that can build relationships apply and grow. Must be able to travel but no relocation required.
See Radio Careers
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