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Volume 23, Issue 101, Jim Carnegie, Editor & Publisher

Tuesday Morning May 23rd, 2006

Radio News ®

XM drops controversial
wireless buy
XM Satellite Radio announced after the stock market closed yesterday that it was abandoning its long-pending deal to acquire WCS Wireless and its wireless spectrum licenses spread throughout the US. The 198 million bucks deal had been controversial since it was announced last July (7/15/06 RBR #138), with terrestrial radio broadcasters concerned that XM planned to use the WCS spectrum for local programming - a way to get around the national-only restriction of its current satellite radio license. Two months ago, the NAB reiterated its objections and urged FCC Chairman Kevin Martin and his fellow Commissioners to reject the WCS sale to XM, charging that XM had failed to tell the FCC what its plans were for the additional spectrum. With the deal stalled on the regulatory front, XM said yesterday it was terminating the deal. "With the inability to obtain the necessary government approval for this transaction in a timely manner, WCS Wireless needed to pursue alternatives for its spectrum with greater certainty of regulatory approval," said XM Chairman Gary Parsons in announcing that the deal was dead. While terrestrial radio operators may be celebrating the scuttling of the deal, Goldman Sachs analyst Mark Wienkes says it is also good news for XM shareholders. "We view the WCS termination as a net positive for the stock as it reduces planned spending in the near-term and could be the first step towards restoring investor confidence after a recent string of negative headlines," he said in a note to clients.

CBS sells its theme parks; Radio sales coming?
Les Moonves is getting CBS Corp. out of the business of operating theme parks. Paramount Parks, which consists of five theme parks, is being sold to Cedar Fair LP, a publicly traded partnership, for 1.24 billion bucks. That price was a bit more than Wall Street had expected, according to Lehman Brothers analyst Anthony DiClemente. He expects to see the cash from the sale proceeds used for stock buybacks. Moonves had indicated from the time of the split from Viacom that the theme parks division was not a core asset for CBS and likely to be sold. Paramount Parks owns five theme parks: Wonderland, Toronto, Canada; King's Island, Cincinnati, OH; King's Dominion, Richmond, VA; Carowinds, charlotte, NC; and Great America, Santa Clara, CA.

RBR observation: What's next? How soon can we expect to see Moonves announcing sales of any of the 35 radio stations he said last week that CBS would be selling (5/19/06 RBR #99)? Don't hold your breath. That sale process has just begun, but we're pretty sure Les is much more committed to the divestitures now than when CBS (then Infinity) put a bunch of stations on the market, then pulled them back when pricing wasn't what they had expected.

Arbitron claims UK ratings victory
As it presses for adoption of its Portable People Meter in the US, Arbitron is gloating that its overseas partner, TNS, has won the contract in Britain to develop a PPM-based system for measuring radio and TV audiences in the London area. The UK competition had PPM up against the same devices (plus one other) that were the final three selected by the Next-Generation team here in the US, so Arbitron is claiming this as a major victory. "The RAJAR evaluation was the most thorough, rigorous and professional evaluation of an electronic measurement system that has ever been conducted anywhere in the world," declared Arbitron CEO Steve Morris. RAJAR, the radio industry ratings consortium in the UK, isn't yet making the jump to using PPM exclusively for ratings. Rather, it has tapped TNS for a two year test of PPM. BARB, RAJAR's TV counterpart, is also involved, so the test will measure both TV and radio audiences in London. Meanwhile, RAJAR also announced a new two-year contract for continued diary measurement of radio listening, with Ipsos MORI as lead contractor.

Greater Media joins
Tribune for MA debate
Tribune's Boston television station, WB-affiliated WLVI-TV, is staging a face-off between three rivals angling for the Democratic nod to run for governor of Massachusetts, with an assist from Greater Media's WTKK-FM. The candidates are Chris Gabrieli, Deval Patrick and Thomas Reilly. Although WLVI's Karen Marinella and WTKK's Margery Eagan are both involved in the event, the format of the event is much more innovative than the traditional journalists-asking-questions approach. Instead, the television station is fanning camera crews throughout the state to get questions from Massachusetts citizens, while the radio station is collecting them during a midday call-in talk show. The debate will be taped at 4PM 5/25/06, and aired later that day, at 10:30PM when the stations think people will be able to actually watch or listen in.

RBR observation: Kudos to Tribune and Greater Media. There is no perfect way for broadcasters to provide campaign coverage, but we feel one of the very best, despite drawbacks and pitfalls, is the head-to-head debate. This format, where voters get to pose the questions, is an excellent idea, even if the stations still must act as a filter to decide which are used. Even when the format is artificially constricted, like presidential campaigns always demand, there is still nothing quite like seeing opponents on the same stage in front of an audience not of their own choosing. Keep bringing us coverage like this and blunt the complaints of politicians and watchdogs alike.

Government pairs with HCN
for nutrition campaign
Non-profit Hispanic Communications Network (HCN) is pairing up with the U.S. Department of Agriculture to see if it can improve the dietary habits of Hispanics in the US. The campaign will be built around Spanish-language releases using radio, television and other media. The core of the program involves getting information about the USDA's 2005 Dietary Guidelines for Americans and MyPyramid food guidance system out to non-English-speaking residents. In a release, HCN said the program will focus on "...Spanish-language public service announcements and messages in newspapers, radio and TV stations, high profile Internet portals, and special events in select communities. Educational HCN claims over 200 radio affiliates and has been expanding into television and Internet publishing.

Tough sledding for Air America patrons
Investors Anita and Sheldon Drobny have been off-again, on-again angels for liberal radio network Air America are definitely in on-mode, and have formed Nova M Radio LLC, a company which seeks to acquire radio stations which will become home to progressive Talk programming, like and including the fare on Air America (4/4/06 RBR #66). The Business Journal of Milwaukee says they've embarked on a novel course to buy an outlet in that market, mimicking the approach to ownership used by the NFL Green Bay Packers. They have been trying to assemble a "community" of owners like the team in green, which numbers almost 112K shareholders. According to the Journal, the Drobny's were seeking big investors, supplemented by smaller investments by average citizens of as little as 10 dollars. They are said to have targeted ex-Packer Willie Davis-owned WMCS-AM, offering an LMA/option.

RBR observation: Interesting strategy. But for it to work, it looks like they will have to cast a wider net. Davis is not selling. It may be time for Nova M Radio to find itself an insider, someone with connections who knows, or can find out, which AM stations can be pried loose, especially decent sticks that do not fit in with a cluster focused on the bigger battle for the FM side of the dial. If we were in the brokerage business, we might be thinking about putting some kind of proposal together...

Ad Business Report TM

Agencies comment on
CBS Radio-PPM deal
Last week, CBS Radio announced a seven-year deal with Arbitron for its PPM ratings data, before the Next-Generation Electronics Ratings Evaluation Team finished its comparison of competing systems for radio ratings (5/19/06 RBR #99).

We asked for some feedback from the agency side on the move:
Rich Russo, JL Media's SVP/Director of Broadcast Services: "It would have nice if they waited for the RFP to be all sorted out but I guess the price was better for them to do it now. The most important thing is that there is a better ratings system on the horizon whether it is PPM or something else."
Jon Mandel, Chairman/MediaCom US and Chief Global Buying Officer MediaCom Worldwide: "I am glad someone in the radio industry is looking at "how can we make it better" instead of doing the delaying tactic of head in the sand, just taking shots at 'why it won't work'."
Matthew Warnecke, VP Mgr Network & Local Radio, MediaCom: is letting Mandel speak for the company.
Kathy Crawford, MindShare President/Local Broadcast: "I'm very pleased that we're moving in the direction of having a far-better ratings service, or shouldn't we say a far-better technological solution to the ratings service. The only thing I'm surprised about is that they didn't wait for MRC accreditation."
Kim Vasey, Senior Partner/Director of Radio, mediaedge:cia: "Unfortunately, the committee [Next-Generation Electronics Ratings Evaluation Team, of which she is a member], as a whole, has agreed not to make any comments about the process."
More tomorrow....

2006 Radio-Mercury Awards finalists announced
Finalists in the 15th annual Radio-Mercury Awards competition were announced today by the Radio Creative Fund. Matching last year's largest number of entries ever, the 2006 Radio-Mercury Awards competition continues to draw entrees from a wide variety of agencies across the country. Previous Radio-Mercury grand champion DeVito/Verdi leads the competition with 7 finalist spots, followed closely by multiple winners DDB Chicago and Miami based agency Crispin Porter+ Bogusky. Giving the veteran shops a run for their money are newcomers, Barber Martin Advertising, Copacino + Fujikado, ikam, Leopold Ketel & Partners, MAKOS Advertising, and Meads Durket. The 2006 Radio-Mercury Awards will recognize and reward the creators of Radio's best commercials with over 160,000 in cash prizes during a gala, invitation-only luncheon and awards ceremony 6/8 at Cipriani on 42nd Street in NYC. Gerry Graf of TBWA\Chiat\Day served as this year's Chief Judge.
| See the complete list of finalists here |

Media Markets & Money TM

Cedar Cove snags its second CO FM
Victor Michael Jr. has logged a lot of frequent trader miles on the commercial side of the radio dial. Now, his non-commercial Cedar Cove Broadcasting, which he runs with Lori Michael and Mitchell Beranek, is getting a non-commercial station, KTEI-FM Placerville CO, to go with its KKGN-FM Eaton in the Ft. Collins-Greeley market. The seller is Educational Communications of Colorado Springs, which will get 200K for the 90.7 mHz Class A.

RBR observation: Despite the name of the seller, KTEI is nowhere near Colorado Springs. It's in very unrated territory in the southwest quadrant of the state, not far from Telluride. Placerville is big enough to have numbered streets, but only four of them.

Washington Media Business Report TM

Can reporters be prosecuted for reporting leaks?
US AG Alberto Gonzales says that the way he reads the law, if the information is classified, yes they can. And the government is within its rights to track that reporter's phone calls if it is part of a criminal investigation. Speaking on ABC's "This Week," he said it would not be done routinely but rather with a court order and with probable cause. The Reporters Committee for Freedom of the Press responded quickly. Executive Director Lucy Daiglish told the Associated Press that she could not "...imagine a bigger chill on free speech and the public's right to know what is government is up to, both hallmarks of democracy, than prosecuting reporters."

Internet Media Business Report TM

Tribune taps the real estate market online
As its parent company's battle to keep up classified ad sales as business moves toward the Internet, Tribune Interactive has snared another major piece of that new media puzzle. It now owns ForSaleByOwner.com, one of the top 10 online real estate sites, based on data compiled by comScore Media Metrix. It had more than 1.6 million average monthly unique visitors in 2005. Along with collecting a fee from homeowners who list their homes for sale, the site sells advertising to folks with related products, such as mortgages. Insurance, appraisals and, yes, even real estate agents, should some people who go to the site decide that they'd be better off engaging a pro to handle their sale. "Our acquisition of ForSaleByOwner.com extends our long history of providing consumers with the opportunity to advertise a home for sale as a private party listing. We also remain strongly committed to realtors, to whom a majority of consumers turn for real estate transactions," said Tim Landon, President of Tribune Interactive. Terms of the website buy were not disclosed.

RBR Stats

Podcasting use by 12-34 year olds up; 35+ down
Based on interviews with radio listeners in ten national markets, Bridge Ratings released its monthly update of podcast use. Phone interviews were conducted with members of the Bridge Ratings Podcast Panel to measure their use of podcasts over time. This is an on-going study of podcast users 12-64 years of age who use traditional radio.
| Read More... |

TVBR TV News

Newbie nets filling up
their local dance cards
Today's Jeopardy (apologies to KingWorld) answer: Burlington, VT. The question: What is the largest US TV market that does not yet have an announced affiliate for either the CW network or MyNetworkTV, both set to launch this September? Burlington is DMA #90 and at least one of the two newbie nets has a home in each of the 79 larger markets - and both do in most cases. Having announced first with a solid group of affiliates owned by CBS and Tribune, CW remains ahead in the battle for affiliates - over 90% of US TV households covered for CW, which is owned by CBS and Time Warner, vs. 79% for MyNetworkTV, owned by News Corporation/Fox. CW has filled out the top 50 markets, indeed all the way through #79, while MyNetworkTV still has some holes to fill in the top 20: #5 Boston, #17 Miami, #18 Denver and #19 Sacramento.
| Here's the updated list, compiled exclusively for you by TVBR |
©2006 Radio Business Report, Inc. All rights reserved.

TVBR observation: Logic would dictate that the flurry of affiliate announcements from the CW should slow down, now that only smaller markets and less than 10% of US TV households remain to be covered. Clearly there were lots of local stations interested in winning the local rights to a schedule made up mostly of the top shows from the soon to be extinct WB and UPN networks. In fact, Gray Television President Bob Prather said in his quarterly conference call that Gray, which will have seven CW and 12 MyNetworkTV affiliates, didn't get all of the CW affiliations it wanted because it was outbid in several markets. But we still expect a regular flow of affiliate announcements from MyNetworkTV. It is appealing to potential affiliates, despite the lack of any established programming, because News Corporation/Fox already has experience successfully launching a new network (Fox) and because the start-up net offers affiliates more inventory than others to be sold locally.

Transactions

3.5M WVOD-FM, WYND-FM & WZPR-FM Elizabeth City-Nags Head NC (Manteo, Hatteras, Nags Head NC) from Convergent Broadcasting LLC (Bruce Biette) to Capsan Communications LLC (William Whitlow, Jason Baker et al). 100K escrow, 3.25M cash less money paid by buyer to lien holder, 150K note. Includes non-compete. Existing superduopoly. [File date 4/26/06.]

120K KANS-AM Emporia KS from C&C Consulting Inc. (Edward Lipson) to Kansas Radio INc. (Martin R. Hill, Joshua R. Hill, Lisa J. Hill). Note. LMA 9/1/03. [File date 4/24/06.]

Stock Talk

Radio stocks beat the market
Radio stocks showed modest strength on Monday as the overall market ended down, with traders continuing to fret over inflation and what the Fed might do about rates. The Dow Industrials fell 19 points, or 0.2%, to 11,125.

The Radio Index moved up 0.636, or 0.4%, to 158.423. There was no particular news to boost the sector, so maybe radio stocks had been so beaten down that investors are again gaining interest. Cumulus was the strongest performer, rising 4.7%. Saga gained 3.2%.

Radio Stocks

**Here's how stocks fared on Monday**
Company	Symbol	Close		Change	Company	Symbol	Close		Change
Arbitron	ARB		39.31	-0.50	Hearst-Argyle	HTV		22.33	-0.06
Beasley	BBGI		7.22	+0.11	Journal Comm.	JRN		11.94	unch
CBS CI. B	CBS		25.26	+0.05	Lincoln Natl.	LNC		56.59	+0.14
CBS CI. A	CBSa		25.22	unch	Radio One, Cl. A	ROIA		7.97	+0.11
Citadel	CDL		10.49	+0.03	Radio One, Cl. D	ROIAK		7.98	+0.09
Clear Channel	CCU		30.42	+0.26	Regent	RGCI		4.22	-0.03
Cox Radio	CXR		14.85	-0.21	Saga Commun.	SGA		9.62	+0.30
Cumulus	CMLS		11.47	+0.51	Salem Comm.	SALM		14.60	-0.30
Disney	DIS		30.00	-0.15	Sirius Sat. Radio	SIRI		3.96	+0.30
Emmis	EMMS		15.86	-0.13	Spanish Bcg.	SBSA		5.51	+0.14
Entercom	ETM		28.00	+0.02	Univision	UVN		35.46	-0.16
Entravision	EVC		7.85	-0.19	Westwood One	WON		8.49	-0.10
Fisher	FSCI		42.25	+0.08	XM Sat. Radio	XMSR		16.13	-0.47
Gaylord	GET		43.98	-0.34	-	-	-	-	-

Bounceback

Send Us Your Opinions We want to
hear from you.
This is your column, so send your comments and
a photo to [email protected]

This reader responds to our RBR Observation on "CEA comes out swinging for XM" (5/22/06 RBR #100).

Your conclusion is correct (even a little mild), but the situation is even worse than you say. DAT is decreasingly used as data storage, decreasingly in broadcast, and completely dead-in-the-water in music recording (except to transfer ancient recordings archived on DAT). DAT could have been a tremendous consumer medium, probably only now going out of favor with consumers, had it not been for the Serial Copyguard Management System imposed on the technology by the recording industry (Sony shot themselves in the foot - not the first time they have done this)...
| Read More |

Doug Osborne
Director of Sales & Marketing
Martinsound, Inc.

Below the Fold

Ad Business Report
Agencies comment
On CBS Radio-PPM deal Rich Russo, JL Media-"It would have nice if they waited...

Media Markets & Money
Cedar Cove snags its 2nd CO
FM, getting a non-commercial station...

Washington Media Business Report
Can reporters be prosecuted
For reporting leaks? US AG Gonzales says the way he reads the law...

RBR Stats
Podcasting use by 12-34
Up but 35+ demo is down...

Arbitrends

Radio Media Moves

New head
for BEA
Heather Birks has been named Executive Director of the Broadcast Education Association, succeeding Louisa Nielson, who recently stepped down from the post. Birks has been at NAB for over 10 years, most recently as Special Projects Manager.

Vibes Media names Steve Levy to iRadio platform
Vibes Media, a provider of interactive text message and mobile content marketing programs, announced that radio vet Steve Levy has joined the company as Senior Account Director for its iRadio Mobile Messaging Platform. Levy will be responsible for driving client relations for the iRadio program, expanding Vibes' presence in the radio industry, and overseeing the evolution of the iRadio platform as short message service (SMS) technology continues to advance.

May RBR/TVBR
Digital Magazine

Take a look at what's in the May RBR/TVBR Solutions Magazine:
We track the latest evolutions and address the latest topics with our annual Television Upfront feature, speaking to everyone from CBS's Jo Ann Ross to NBC's Keith Turner; TWC's Liz Janneman, OMD's Joe Uva and Magna Global's Bill Cella.

We asked Christine McKenzie, Chrysler Group Executive Director of Brand Events and Agency Relations all about the importance of their annual Media Day in Detroit.

We take a look at the annual Hispanic Radio Upfront events in NYC and interview Colleen Brown, President and CEO of Fisher Communications.

These and other hot industry issues addressed in May.

Read RBR/TVBR in 2 simple steps:
1.Create a simple account with Zinio and download the Zinio Reader.
2. You can then download the
May Issue of RBR/TVBR

RBR Radar 2006

Radio News you won't read any where else. RBR--First, Accurate, and Independently Owned.

Shareholders press
Smulyan for more
Noonday Asset Management is not the only investment firm pressuring Jeff Smulyan to raise his buyout bid for Emmis Communications. Martin Capital Management's managing partner, Frank Martin sent Smulyan a letter spelling out objections to the proposed buyout and filed a copy with the SEC to make sure it was made public. In short, the letter accuses Smulyan of putting his own interests ahead of his fellow shareholders.
05/2/06 RBR #100

CEA comes out swinging for XM
The Consumer Electronics Association (CEA) is blasting the major record labels for their lawsuit against the new XM Satellite Radio receiver with recording capabilities, saying the new device is clearly legal under a law that the labels helped to draft. "The lawsuit is yet another ambush in the labels' ongoing war on innovators and consumers," CEA charged. In chastising the record companies, CEA noted that XM already is the largest single payer of digital music broadcast royalties, plus the record labels receive royalties on every XM recording device sold as provided by Congress under the Audio Home Recording Act (AHRA).

RBR observation: We were there on Capitol Hill for the AHRA hearings back in the 1990s and the only people at the hearings more clueless than the Members of Congress on where technology was heading were the record company reps. At one hearing they displayed the "enemy" that was threatening to destroy the music business, insisting that the record labels had to be paid a royalty on each one sold - never mind that there was no music on it - because consumers were going to use them to hold pirated music and drive the record labels out of business. That "enemy" was a DAT tape. Read more in
05/2/06 RBR #100

Equity firms claim victory
in VNU buyout
Sometimes we amaze ourselves. With 80% as the target for acceptance of a 9.7 billion bucks equity consortium buyout of VNU, we asked earlier this month "We wonder, what will happen if the final tally on May 19th is 79%?" That is exactly what happened.
05/2/06 RBR #100

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