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Volume 24, Issue 101, Jim Carnegie, Editor & Publisher
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Wednesday Morning May 23rd, 2007
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Radio News ®
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 Reassuring the troops
Clear Channel has sent out a memo to employees about the revised buyout bid for the company, assuring them that no "significant" layoffs are planned, but spelling out the company's severance policies. A separate memo to shareholders tells them that they don't have to take shares of the new company, but will have that option if they don't want to cash out completely. Both "Q&A" style memos state that corporate headquarters will remain in San Antonio, that the board of directors had agreed that the 39.20 per share buyout by Thomas H. Lee Partners and Bain Capital was "fair and in the best interests of our shareholders," and that the members of the Mays family will continue to be actively involved in the company, with Mark continuing as CEO, Randall as President and CFO and with Lowry having "an active role." The stake that the Mays family members will have in the new company as investors will not count against the 30% stake available to current shareholders and the memos were careful to point out that no one (most employees are shareholders as well) will be forced to take stock in the new company. "You may make your election on a share-by-share basis," the memo to shareholders explained. As for the employees: "Again, we do not expect the merger to result in workforce reductions, and we do not want employees to experience undue anxiety. However, in the unlikely event some reductions are required during the one year period following the closing of the merger, we have developed a severance plan to assure that you will not be left without protection." The memo then detailed that severance payments run from one month of base pay for people employed by CCU for less than six months up to nine months of base pay for those who have been with the company for three years or more.
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XM satellite back in business
XM Satellite Radio confirms that it was an attempted software upgrade which shut down one of its satellites, leaving many subscribers without service for most of Monday and well into Tuesday. By yesterday afternoon, XM said the problem had been fixed and service restored. Here is the company statement: "XM Satellite Radio has resumed normal levels of service for customers who experienced outages or significantly degraded service starting yesterday. The problem occurred during the loading of software to a critical component of the satellite broadcast system, which resulted in a temporary loss of signal from one of the company's satellites. After you turn on your XM radio, please allow five to ten minutes to reacquire the XM signal. XM apologizes for any inconvenience this has caused."
RBR observation: If it weren't for the pending merger, Sirius could jump on this for the poor way XM handled customer service and communications. It seemed that the company was just trying to ignore the fact that most of its subscribers were not receiving its service. It was many hours before XM even acknowledged on its web site that there was a problem. Meanwhile, it was being roasted on various Internet blogs by its previously loyal customers.
 Google pushes
spectrum subleasing
Google auctions its own online advertising, under terms of which companies control where their ads will appear on Google's search engine by how much they're willing to pay per click. The online giant thinks this model could lead to much more efficient use of the radio spectrum, and suggests that the FCC allow its auction winners to offer wholesale whatever spectrum it has but is not using. According to the Associated Press, in certain areas fully 95% of available spectrum is going unused, and it thinks that license holders in such an area should be allowed to auction of pieces of it "on a wholesale basis" to smaller companies that do not have the wherewithal to engage in a full-fledged bidding war. Google says the net result will be newfound competition in the effort to bring wireless broadband to both homes and businesses. A large chunk of prime spectrum is coming on the market as television broadcasters get set to turn in their analog licenses and begin digital-only transmission beginning 2/17/09. The spectrum auction will take place well before that date, and FCC Chairman Kevin Martin (R) has been talking about getting the auction under way as early as this Fall.
RBR observation: This appears to come in under the heading of an idea worth looking at, but not one to rush into headlong. One watchdog mentioned the ugly possibility of a small company investing heavily in a spectrum device only to find itself shut out of the spectrum once an private auction is completed. The big positive for broadcasters in all this is that they will be long gone from this portion of the spectrum while such issues are hammered out. There will no doubt be plenty of digital conversion issues, and it will be nice to let someone else worry about this one.
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 FCC looking for
Clear Channel comment
There is so much action going on with Clear Channel these days that this headline could refer to any number of items. Among the things it has nothing to do with are local ownership caps/rulemakings, the re-establishment of national ownership caps, nor is it about taking the company private. Nope, this time the FCC is asking about the relatively mundane sale of Clear Channel's television group to TV Acquisition LLC. The 1.255B deal sending stations in markets across the nation, including 35 full-power broadcast television stations (according to the FCC) and number low power sticks, was filed at the Commission on 5/7/07, and now the floor is open for public comment, including petitions to deny. The proceeding will be held under the ex parte permit-but-disclose rules, which basically means that you don't have to contact all interested parties with copies of whatever you send in. The docket for this proceeding opened upon the 5/9/07 public announcement date, and runs until 6/8/07. TV Acquisition is the licensee name being used by Providence Equity Partners, the party behind the acquisition.
Another week without huge attention-grabber
Project for Excellence in Journalism has its new chart out for the week of 5/13-5/18/07, and the top ten stories are unusually balanced. Two stories - events in Iraq and campaign 2008 - shared the top slot (with PEJ giving the nod to Iraq to head the list). The individual media lists reflected the lack of any one big story, with two putting Iraq events on top, two going with the campaign, and radio finding a third option - the ongoing immigration saga, which just missed making it a three-way tie for first on the total media chart with 9%. PEJ noted the unusual circumstance of the events portion of the multifaceted Iraq coverage clearly outdrawing the policy debate this time around. The biggest disappearing stories were the New Jersey terror plot and the Kansas tornado story. The fired attorney controversy disappeared from the top 10 list as well, but testimony from former DOJ exec James Comey picked up where it left off, keeping an unwelcome spotlight on AG Alberto Gonzales.
| Top ten lists here |
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School's Out In.
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Ad Business Report TM
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Cold Stone goes multimedia
There is drama, there is passion, there is mystery. And Bigfoot and spoiled heiresses too, all focused on ice cream. And not just any ice cream. Cold Stone Creamery wants you to associate all of these strong emotions, along with urban legends and pop culture references with its brand, and it is weaving all of these emotional elements together with humor to push its brand, using television, radio, online and the tagline LOVE IT LOVE IT. Saatchi and Saatchi handled the creative and Santy Advertising of Phoenix is doing placements. The Creamery has a lot of territory to cover, with almost 1,400 locations in the US, Puerto Rico, Guam, and in certain Far Eastern countries.
RBR observation: This is certainly the time of year to start pushing ice cream. And if you have rival ice cream outlets in your area, you may want to remind them that offense is the best defense, and since Cold Stone may be making a play for their business, this may be the right time to go on the air with some robust creative of their own.
 Newspapers fighting back
to regain ad share
Relationals, which bills itself as "the leader in customer relationship management (CRM) and sales force automation (SFA) for the newspaper industry," announced that The E. W. Scripps Company has selected Relationals as its company-wide CRM platform to streamline sales processes and improve opportunity management across all its newspaper advertising teams. "Relationals is revolutionizing the advertising sales industry for newspapers," Linda Sease, Vice President of Newspaper Marketing for Scripps, was quoted as saying. In her view, the Relationals system simplifies sales processes, adds a critical layer of collaboration, and enables effective targeting of potential advertisers with greater accuracy and more measurable results. Based on success at the Rocky Mountain News in Denver, the Treasure Coast Newspapers, based in Stuart, Fla., and the Evansville (Ind.) Courier & Press, Scripps is now planning to roll out Relationals to all of its newspaper properties. Scripps newspapers will use Relationals to execute opportunity-generating telesales and email campaigns, enable precise account activity monitoring, integrate sales efforts with existing business systems, and consistently collaborate around the sales process.
RBR observation: Radio, television, Internet sites and everyone else have been targeting daily newspapers as the place to shave off ad spending. And why not? The lumbering old dailies were an easy target - high-priced, inefficient and poorly targeted. Most put little effort into ad sales because they didn't have to - the business just kept coming to them out of habit. No more. The auto sector led the exodus from daily newspapers (and other "old media" properties as well) and other savvy advertisers have begun questioning the efficiency of using a medium that mostly misses the prime younger demos. But don't count out the newspapers. They are fighting back - and fighting for their survival. They will become better marketers, hire more sales people and train them better. The dailies aren't going away.
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| Media Business Report TM |
 Nielsen goes green
The Nielsen Company announced the launch of the Green + Design Conference and Expo, a new conference and trade show focused on environmental design in the commercial, hospitality, residential and retail design industries. The inaugural Green + Design Conference and Expo, to be held October 1-2, 2007 in Atlanta, will be the design industry's most comprehensive educational and trade event focusing on integrating the principles of sustainability into project designs. The event, produced by Nielsen Business Media, will draw from its existing events and publications to create one show that fills the need for green design. "Green + Design Conference and Expo is about combining green principles with utility, economy, and practicality, and helping our audience integrate the principles of sustainability into project designs," said Tim Fearney, Show Director, Nielsen Business Media. The Green + Design Conference and Expo program will be produced by the editorial staff of Nielsen Business Media's Contract magazine, Hospitality Design magazine, Kitchen & Bath Business (K+BB), DDI Magazine, Multi-Housing News and Commercial Property News. The Green + Design exposition floor will feature over 15,000 square feet of exhibit space dedicated to green products used in sustainability design.
Tribune tightens its retail sales
Have you ever heard of TMN Retail? We didn't think so - that's because it's hot off the presses at Tribune Media Net. The new arm of the multimedia company's newspaper sales division will come together under the TLC of Barry Haselden to handle the needs of about 15 of its top national retail clients. "This idea is the direct result of dialogue with our major clients," said Ken DePaola, Tribune Media Net president. "They told us how they prefer to buy media, and TMN Retail is our response. This is all about going to market in a way that works best for our customers." The move will also remove a burden from local sales forces, allowing them to bore in even harder on local clients. Tribune said the project will initially focus on newspaper/client relations and is expected to be fully up-and-running by September.
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| Media Markets & Money TM |
Hutton strikes again
Santa Fe broadcaster Ted Hutton just announced last week that he was acquiring KWRP-FM for 700K, complementing Hutton Broadcasting's other two outlets, KVSF-AM and KQBA-FM. Now he's back with yet another deal, for KLBU-FM. The seller is Robert Brahms' Blu Media. According to broker of record Michael J. Bergner, the price is 450K.
Close encounter in West Palm Beach
The Betty Ginsburg Revocable Trust now has the keys to WDJA-AM in West Palm Beach. The sellers were Richard and Pablo Vega. Brokers John Pierce (seller) and Frank Boyle (buyer) report that the price was 2.1M.
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| Washington Media Business Report TM |
 NAB Radio Board
weighs in on CRB
Broadcasters are among many trying to establish a presence on the Internet who see the recent Copyright Royalty Board decision on streaming compensation as a huge if not fatal impediment. The NAB Radio Board has announced its willingness to support any viable remedy. It issued a statement saying that the CRB decision "...will cause significant harm to broadcasters that stream over the Internet." "The radio board supports a comprehensive approach to addressing the CRB rate determination, including legislation that vacates the CRB decision and establishes an interim royalty rate structure."
RBR observation: The music business is facing immense challenges. Old techniques once used to gain exposure and propel sales don't work the way they used to. Any tune spun by a webcaster is a free advertisement. Every person listening to a webcaster is a potential customer for the music industry. Why they would want to shut this excellent source of free publicity is beyond us.
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| Internet Media Business Report TM |
CBS in blog buy
CBS Corporation is now the owner of the blog site Wallstrip, which dishes out stock market news, rumors and advice. No word on the price, which was believed to be in the single digit millions and not material enough for corporate to even issue a press release. Wallstrip founder Howard Lindzon confirmed the deal on (where else?) the blog, intimating that the acquisition involved just a tiny portion of the 1.8 billion in cash that CBS has lying around. He joked that the recent runup in CBS' stock price was likely due to news of the deal leaking out. And after taking a couple of swipes at his new corporate parent for canceling "Jericho" and the whole Don Imus fiasco, Lindzon allowed as how "Cash Flow matters and CBS has plenty of it." He's also a big fan of CBS Interactive boss Quincy Smith and says he plans to buy some shares of the new mother ship. "I like their syndication strategy and I am bullish on Quincy and the Interactive Division of course," Lindzon blogged.
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| Transactions |
10.6M WLTZ-TV Columbus GA from Lewis Broadcasting Corporation (J. Curtis Lewis III) to Sagamore Hill Broadcasting of Georgia LLC, a subsidiary of Sagamore Hill Broadcasting LLC (Louis S. Wall). 530K escrow, balance in cash at closing. LMA 5/1/07. [File date 5/4/07.]
1.15M WGHN AM & FM Grand Haven MI. 100% of WGHN Inc. from William J. Struyk (70% to 0%), Ronald Moss (30% to 0%) to Will Tieman (0% to 100%). Cash, 1M to Struyk, 150K to Moss. [File date 4/30/07.]
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| Stock Talk |
Choppy trading, mixed ending
Stock prices closed mixed after a day of up and down trading, with the market lacking direction while waiting for some government reports due out later this week. The Dow Industrials finished the day down three points at 13,540. The S&P 500 was also down a bit, while the Nasdaq Composite was up slightly.
Radio stocks were mostly lower. The Radio Index declined 0.540, or 0.3%, to 162.290. Westwood One was the big gainer, up 2.5%. Citadel was the worst performer, down 2.3%.
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| Radio Stocks |
Here's how stocks fared on Tuesday
| Company |
Symbol |
Close |
Change |
Company |
Symbol |
Close |
Change |
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Arbitron
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ARB
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50.21
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-0.30
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Hearst-Argyle
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HTV
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26.28
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+0.28
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Beasley
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BBGI
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8.93
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-0.05
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Journal Comm.
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JRN
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13.92
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+0.10
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| CBS CI. B |
CBS |
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32.82
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-0.02
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Lincoln Natl.
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LNC
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73.75
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-0.02
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| CBS CI. A |
CBSa |
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32.78
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-0.08
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Radio One, Cl. A
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ROIA
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7.52
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unch
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| Citadel |
CDL |
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8.47 |
-0.20 |
Radio One, Cl. D
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ROIAK
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7.52
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-0.03
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Clear Channel
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CCU
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38.11
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+0.06
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Regent
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RGCI
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3.30
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-0.08
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Cox Radio
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CXR
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15.09
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-0.12
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Saga Commun.
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SGA
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9.69
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+0.12
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Cumulus
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CMLS
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9.48
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-0.08
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Salem Comm.
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SALM
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12.47
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+0.15
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Disney
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DIS
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36.27
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-0.17
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Sirius Sat. Radio
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SIRI
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2.80
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+0.01
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Emmis
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EMMS
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10.62
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-0.22
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Spanish Bcg.
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SBSA
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4.63
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+0.19
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| Entercom |
ETM
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27.61
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-0.36
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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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9.45
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-0.10
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Westwood One
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WON
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7.78
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+0.19
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Fisher
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FSCI
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50.23
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+0.53
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XM Sat. Radio
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XMSR
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11.16
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+0.02
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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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Media Business Report
Nielsen goes green, Launch of
The Green+Design Conference & Expo new conference/trade show focused on...
Tribune tightens its retail sales
Have you ever heard of TMN Retail?
We didn't think so...
Media Markets & Money
Hutton strikes again
Santa Fe broadcaster back with another deal...
Washington Media Business Report
NAB Radio Board
Weighs in on CRB trying to establish a presence on the Internet...
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Stations for Sale
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NE Louisiana FM
Great stand alone market!
Offered at 6 X 2006 BCF
[email protected]
(303)758-6900
CA Coastal Class A
Rated Market $1.5M
CO Rated Market C.P.
Class C1 $400K
Brett Miller - 805.543.3466
[email protected]
OR Coastal Class A FMs
Positive Cashflow $795K
ND Small Market C.P.
Class C1 $150K
Brett Miller - 805.543.3466
[email protected]
 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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Bound for Boston
Salem Communications announced the appointment of Scott Cohagan as General Manager for Salem Radio Group Boston, overseeing operations of the three-station radio cluster which includes "Boston's Conservative Talk" 1150 WTTT, 590 AM WEZE "The Word," and "The Spirit of Boston" 590 AM WROL. Cohagan joins Salem Boston following several years with Forever Broadcasting in Pennsylvania where he served as market manager, station manager and general sales manager in a variety of markets.
Davidson joins
Metro Networks
Westwood One's Metro Networks has named Robin Davidson as General Sales Manager, Pennsylvania, based in Philadelphia. Davidson has many years of sales experience in the Philadelphia market at Comcast Spotlight, WXTF-TV and WBEB-FM.
Blades wakes up Milwaukee
"Mathew Blades in the Morning" is the new morning show for Journal Broadcast Group's WKTI-FM Milwaukee. Blades, coming from CBS Radio's KWLI-FM Denver, debuts the new show on May 29th, but he and his team will be hosting WKTI's "A to Z Memorial Weekend" this weekend. In addition to Blades, the new team includes Erin Austin and AJ.
Dunkin joins VRD
Vallie-Richards-Donovan announced that Greg Dunkin has joined the consultancy firm. Dunkin, previously at Coleman, is the originator of the "Fresh FM" format. Not coincidentally, MRH Marketing, the holder of the "Fresh" radio trademarks, has named Vallie-Richards-Donovan as its agent and consultant for the AC format.
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More News Headlines
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Too hot to handle
Entercom's WRKO-AM Boston has dropped plans to have former Don Imus sidekick/producer Bernard McGuirk try out on air this week. The Black Community Informational Center had planned to protest outside the Entercom studios during the broadcasts, but has now dropped its protest plans. It was McGuirk who first referred to the Rutgers women's basketball team on air as "hos," leading to Imus calling them "nappy-headed hos."
Habitat for LPFMity
LPFM advocate Prometheus Radio Project reports that a wide cross-section of "civil rights champions, community organizers, radio enthusiasts and more" are meeting in Greenville SC to raise an LPFM station, "doing everything from soldering studio audio cables to tuning and raising the broadcast antenna." Beyond the tangible benefit of getting 95.5 MHz WMXP-LP up and running, it will be a learning experience as over 40 related workships will be held over a three-day weekend. The station will be run by the Malcolm X Grassroots Movement for Self-Determination. The event is scheduled for 6/8-10/07.
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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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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.
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 and Florida Broadcasters get involved it is your business.
05/22/07 RBR #100
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
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