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Welcome to RBR's Daily Epaper
Volume 24, Issue 106, Jim Carnegie, Editor & Publisher
Thursday Morning May 31st, 2007

Radio News ®

Highfields comes onboard
Approval of the revised Clear Channel Communications buyout/recapitalization seems virtually assured, with former dissident shareholder Highfields Capital signing a voting agreement to vote its 5% stake in favor of the deal. Highfields will be seeking as much as it can get of the 30% stake available to current shareholders and will get one of the 12 seats on the new board of directors. According to its SEC filing, Highfields inked the deal Saturday (5/26) with Bain Capital and Thomas H. Lee Partners, who have an offer pending to take Clear Channel private at 39.20 per share in cash or, up to that 30% limit, stock in the new company. Highfields is now required to vote all 24,854,400 of its shares in favor of the buyout. In turn, Bain and Lee have agreed that the public shareholders will have at least two representatives on the board. Highfields will get to select one of the initial board members and nominate that person or his successor for election to the board at each annual shareholders meeting. The second public shareholders seat is to be filled by the board's nominating committee in consultation with Highfields and any shareholder who holds 3% or more of the company's outstanding shares.

RBR observation: No date has been set for the actual vote on the revised offer, since the complicated terms have to be reduced to writing and new proxies mailed out to shareholders, but it is looking more and more like this is in the bag. For other radio companies, that means that once Clear Channel finishes off the current auction of a group of small market radio stations, it will have to get ready for some big market sales that will be required to comply with FCC ownership limits as the change of ownership takes place. That will put some very interesting big radio properties up for grabs.

Tinky Winky back in the news
First it was the late Jerry Falwell who questioned the sexual orientation of noncom TV stalwart Tinky Winky, one fourth of the Teletubbies. Now a children's rights watchdog from Poland has weighed in on the topic. The BBC, which produces the show, denies any hidden agenda. Ewa Sowinska, the Polish watchdog in question, wanted the purple Teletubby to be investigated, and suggested that the program amounted to "homosexual propaganda." The allegations trace to Tinky Winky's habit of carrying a handbag, but the BBC said it is simply a prop. In a statement, BBC responded, "Children love to play with bags of all kinds and this fascination is reflected in Tinky Winky's favorite thing. To suggest the series has a political agenda is simply not true." Sowinska is said to have withdrawn the request for an investigation.

RBR observation: We have had two children exposed to the Teletubbies, and both - now ages 10 and eight - have moved on. The older, a girl, was fascinated at a very young age in a way she hadn't been with any other program up until that point. The younger, a boy, never warmed up to it so much. Why? Who knows. If the show has had any long term effect, perhaps it is a love of bunnies (the Teletubby landscape is absolutely infested with the long-eared critters). We currently have a baby rabbit hanging around our yard despite the best efforts of our dog to encourage alternative living arrangements, and our children will generally drop whatever they're doing at least for a few moments to watch it when it comes out into the open. But we are not ready to credit or blame the Teletubbies for that part or any other part of their personalities.

CBS Corp. acquires Last.FM
CBS Corp. has acquired, a global, community-based, music discovery network, for 280 million in cash. It currently has more than 15 million active users in more than 200 countries. Founded in 2002, the company creates communities around music by bringing together listeners, artists and music. Through its "scrobbling" technology and social recommendation engine, builds a comprehensive profile of each user's musical taste and leverages each user's song list to make highly personalized recommendations, connect users who share similar tastes, provide custom radio streams and other music related community features. In addition, the site has an events listing that can recommend over 200,000 festival and music events globally. This acquisition follows a number of CBS Interactive announcements including the purchase of, investments in Joost and Spot Runner and the recent expansion of the CBS Audience Network to include a total of 25 online partners.

" is one of the most well established, fastest growing online community networks out there," said CBS Corp CEO Les Moonves. "Their demographics also play perfectly to CBS's goal to attract younger viewers and listeners across our businesses. adds a terrific interactive extension to all of our properties and also is a huge step in CBS Corporation's overall strategy of expanding our reach online to transition from a content company into an audience company." As part of the acquisition, the team, including founders Felix Miller, Martin Stiksel and Richard Jones, will continue to independently run the online network. The management team will work with all relevant CBS divisions to apply their community-building and technology expertise to extend CBS businesses online and within the mobile space. Together, and CBS plan to offer a new way for people to consume media. Part of CBS's interactive strategy has been to build communities around all of its properties. See agency comments in Ad Business Report.

RBR observation: is the 11th ranked music site and 34th ranked social network, globally, according to Bank of America Equity Research. The goal is likely to utilize CBS' other media properties to gain a better foothold in the social networking space, and use this as the springboard via its radio listeners. CBS didn't pay much for Last.FM, so it intends to do the heavy lifting itself. As well, most of the CBS Radio websites aren't very developed, so this may be a good shot in the arm for them. CBS tells us the details of monetization and cross promotion are still being worked out, but it is looking at a number of ways to further monetize the site such as offering sponsorships to clients - for instance a client could sponsor a country music stream for a month. We figure the venture will likely begin harvesting radio listeners before television viewers, because of the music focus.

Sony and Michael Jackson buy Viacom's music division
Viacom is getting out of the music publishing business, selling its Famous Music LLC to Sony/ATV Music Publishing, which is co-owned by Sony and trusts formed by Michael Jackson. Terms of the deal were not disclosed, although the Wall Street Journal tagged it at around 370 million bucks. Sony/ATV already owns or administers over a half million music copyrights, including, among other things, The Beatles catalog. "This is a milestone event for Sony/ATV Music Publishing. The diverse collection of songs in this catalogue range from timeless classics to contemporary hits, and I am pleased to add the acquisition of Famous Music to Sony/ATV," said Jackson. Founded in 1928, the Famous Music catalogue includes 125,000 songs and sound cues, including such hits and classics as "Footloose," "Moon River," "Take My Breath Away," "It Don't Mean a Thing (If It Ain't Got That Swing)," "Satin Doll," "Silver Bells," and "That's Amore." The catalogue, founded originally to publish music from "talking pictures," also includes the widely recognizable movie themes from Braveheart, The Godfather, Forrest Gump, Mission Impossible and the "Axel F" theme from Beverly Hills Cop. The catalogue includes contemporary hits such as "Bad Day" (Daniel Powter), "Hips Don't Lie" (Shakira), "The Real Slim Shady" (Eminem), and "Beautiful" (written by Linda Perry - performed by Christina Aguilera). The company also owns the Bjork, Duke Ellington, Dave Grusin, Bush and Boyz II Men catalogues, and songs from smash Broadway shows such as A Chorus Line and The Producers. Famous Music's roster of songwriters includes Shakira, Akon, Linda Perry (who has written for Pink, Gwen Stefani, and Christina Aguilera), 7Aurelius (who has written for LL Cool J and Mariah Carey), Fred Jerkins III (who has written for Destiny's Child and Whitney Houston), Dave Tozer (who has written for John Legend), Mike Mangini (who has written for Joss Stone and Baha Men), Charlie Midnight (who has written for Hilary Duff and James Brown), Darrell Scott (who has written for Dixie Chicks and Faith Hill), Modest Mouse, Jet and Ozomatli.

Coverage adds up to a Mideast focus
Iraq, pretty much as usual, was the leading topic in the news during the week of 5/20-25/07 if you add up the various permutations of coverage as tabulated by the Project for Excellence in Journalism. But in the absence of any one big story, coverage was scattered in a number of directions. The Iraq policy debate nosed out Immigration on the PEJ overall list, with both getting about 10% of the newshole. However, the conflicted Mideast really did manage to dominate the overall news picture for the week. Add in two other Iraq slants (events and homefront) and the total Iraq rises to 21%, and add in coverage of Lebanon and Iran and the Mideast total clocks in at 30%. The immigration story was fueled by compromise legislation in Washington which managed to draw fire from both the liberal and the conservative wings of Congress. The 2008 campaign took a back seat to all of this, weighing in at only 6%. The biggest story to disappear from the overall top 10 list was the passing of Jerry Falwell. It was also the second week in a row during which the top ten list, if not the nation as a whole, enjoyed blessed relief from any severe weather stories. There were, however, an unusual number of stories receiving top 10 attention from one, and only one medium, and two were on the overall top ten list. Newspaper alone drove the Iraq homefront story and radio alone drove coverage of a Pew report on Muslim Americans. 12 additional stories showed up on only one list apiece.
| Top ten lists here |

Ad Business Report TM

Feinberg, Russo: CBS-Last.FM deal a good move
Matt Feinberg, SVP/National Radio, SVP/Director, Interactive Broadcast, Zenith Media Services and Rich Russo, JL Media's SVP/Director of Broadcast Services, tell us the CBS Corp. buy of Last.FM looks like a good opportunity for the company and will look into it for clients (see TV News).

Said Russo: "Last.FM, as well as Pandora and other "create your own" radio sites, are a good acquisition for any company trying to pinpoint the music scene and the dynamics of it. We are well into an era where most record companies are irrelevant, despite the fact that the musical landscape is more fertile than it has ever been. So these sites and the ways they expose music, not just of established core artists but of unknown ones is the wave of the future. It's good to get on board now. These stations etc are also great potential HD channel opportunities as well. But in reality they will translate well to the eventual in-car streaming and cell phone radios. This sort of thing could have a bigger upside than Satellite did. I also see that with the decline of the record business and the more mixing in of new music that isn't tied to a label or a publishing company, that this music will get more spins due to the potential of less royalties paid out. It's going to be beyond big-they need to start inserting spots quickly."

We asked Feinberg what they would need to bring to the table when pitching a package deal for CBS Radio stations/websites and Last.FM: "At the end of the day, it's all about audience. Almost anything we do is about the audience/environment-in any particular order, depending on what the client and brand's objectives are. I can't speak to the site itself (I'm not that familiar with it) but at the end of the day anybody who gets involved in multimedia, it's about environments and audience numbers, so I applaud the move. Without knowing all of the details, it sounds like it's a step in the right direction." Feinberg also notes that in bringing the pitch to the table, from the sales perspective, the ability of the vendor to understand how to how these venues work together and report on them (which most of them don't) is important. "Most people, we have found out, on the digital and terrestrial side, don't know how to combine the numbers-something we've been working on here for quite a while. Combine the metrics and look at the overall picture. Separate the pieces and then be able to aggregate them and understand how they are intertwined. So we often end up doing the analytics ourselves or guiding them through the analytics."

George Murphy to exit Chrysler
Chrysler Group announced its marketing chief, George Murphy, VP/Global Brand marketing, is leaving, marking the second top exec to depart since the automaker's sale to Cerberus Capital Management this month. Murphy, who will leave the company this week, has been with Chrysler since 2001. Chrysler also last week also replaced EVP/procurement and supply, Peter Rosenfeld, with Simon Boag. Murphy's time there involved at least one campaign that was criticized by Chrysler dealers, including last summer's "Dr. Z" campaign, which touted the company's ties with Daimler just months before it was spun off. He also developed a new campaign for Chrysler, dubbed "Engineered Beautifully," which started this month. Chrysler's U.S. sales were down 3% in the first four months of this year after falling 7% in 2006, according to Reuters.

Media Business Report TM
Newspapers tout online growth
Ad sales for print editions are still suffering, but the Newspaper Association of America pointed proudly to growth on the Internet side as it reported facts and figures for Q1. Online ad sales for newspaper Web sites shot up 22.3% in Q1 from a year ago to 750 million bucks. Meanwhile, spending for print ads declined 6.4% to 9.8 billion. "The percentage of ad spending generated by newspaper Web sites continues to grow as advertisers realize the value of the medium's Web audience - a group of consumers who have higher household incomes and shop online more frequently than other Internet users. We expect advertising on newspaper Web sites to continue to contribute to the industry's overall revenue stream as newspapers provide innovative content and up-to-the-minute news and information our audience demands," said NAA President and CEO John Sturm. The pain on the print side was across the board. Classified was the big loser, falling 13.2% to 3.4 billion. Retail was down 2.2% to 4.8 billion and national declined 2.8% to 1.7 billion. All in all, newspaper ad revenues for Q1 of 2007, print and online combined, declined 4.8% to 10.6 billion.

RBR observation: The problem, of course, is that the double digit growth in online ad revenues is from a base still measured in hundreds of millions, while the declines on the print side are from figures in the billions. If you draw a graph and project out, those lines will eventually cross. It is, however, going to be a very painful time for the newspaper industry as it works to get to that revenue intersection. Meanwhile, everybody and their brother are competing for a piece of that online ad pie.

Media Markets & Money TM
Sandab reels in two on the Cape
Stephen D. Seynmour's Sandab Communications, under licensee name Cape Cod Broadcasting, is doubling the size of its cluster at the Massachusetts tourist destination. It already has WKPE-FM in South Yarmouth and WQRC-FM in Barnstable. Now it's picking up a pair of FMs from Charles River Broadcasting, including WFCC-FM Chatham and WOCN-FM Orleans. According to broker George Reed of Media Services Group, the pricetag is 7.5M. An LMA kicked off 4/16/07.

Close encounter in Tennessee
Broker Ed Henson of Henson Media tells us that the agreement sending WVRY-FM in Waverly TN from Salem Communications' Reach Satellite Network to Grace Broadcasting Services is a done deal. The buyer, headed by Lacy Ennis, paid 900K for the station. Grace is already active in the area with WQSE-AM White Bluff and WFGZ-FM Lobelville.

Washington Media Business Report TM
MAP gets an extension
The FCC put out a call for comments concerning home shopping stations as part of its review of the Cable Television Consumer Protection Act of 1992 with a due date of 6/18/07, and with reply comments due two weeks thereafter. Media Access Project asked for an extension, saying that it wanted to comment, but was also interested in commenting on a number of other pending FCC proceedings. MAP also suspects that many other entities are running into similar comment preparation scheduling conflicts. The FCC agreed that another month's time is warranted, and has moved the due date for comments to 7/18/07 with reply comments due 8/3/07.

Entertainment Media Business Report TM
TripleX ESPN Radio in DC adds Hokies
Red Zebra Broadcasting, ISP Sports and the Virginia Tech Athletics Department announced Triple X ESPN Radio has joined the Virginia Tech ISP Sports Network. Beginning with the 2007-08 academic year, all Virginia Tech football and men's basketball games, and the Advance Auto Parts Hokie Hotline will air on 94.3 FM, 92.7 FM and 730 AM in the Washington, DC Metro Market.

Beasley adds Mancow to Philadelphia
Talk Radio Network-FM's Erich "Mancow" Muller had added another station, WWDB-FM Philadelphia, to his affiliate list. Bruce Gilbert, General Sales Manager of WWDB says, "There is nothing in the Philadelphia market in morning drive that can compare to Mancow's Morning Madhouse...extremely pleased at the audience response and the increase of revenue after only one week on the air". WWDB, Philadelphia is the seventh major market to be added in recent months, including San Francisco AM 860 KTRB; Cincinnati Supertalk 96.5; Miami Mantalk 640 AM; Indianapolis FM TALK 93.9; Atlantic City The Ace 102.7; and Reno The Buzz, 1270 AM. Additional stations, including Houston, will be announced in the near future.

Former US prosecutor
lands on radio

Salem Communications' KRLA-AM "News Talk 870" Los Angeles has launched a new daily talk show featuring former Assistant US Attorney Kevin James. The former federal prosecutor took to the airwaves this week, hosting "Kevin James Live" 9-11 pm weeknights. "Kevin James is a great fit with our conservative hosts. We've been looking for strong local talent to bring in to our evening line-up. "With his extensive experience in high profile entertainment matters, he has a keen insight on issues that impact our community," KRLA Program Director Craig Edwards. After three years as an Assistant US Attorney in LA, James spent more than10 subsequent years as a litigator in high profile entertainment matters, with regular radio stints to provide legal expertise and commentary to talk radio stations nationwide. In early 2004, James left the legal profession to become a full-time talk radio host, first at KTOK in Oklahoma City, then in Los Angeles where he hosted "Red Eye Radio" on KABC. He has also served as a regular panelist for Court TV's "Catherine Crier Live" and appeared on CNN as a commentator and legal analyst.

Internet Media Business Report TM
News Corp.-NBCU deal adds more content providers
News Corp. and NBC Universal announced the addition of Fuel TV, Oxygen, Speed, Sundance Channel and TV Guide to their joint venture's growing roster of content providers. Each network will bring original content that showcases its programming expertise to the new site and video network on a non-exclusive basis. For Fuel TV and Speed, the new venture will distribute both providers' short-form content across its distribution network and will host their programming on its destination site. The network also includes some of the most-popular sites on the Web, including AOL, MSN, MySpace, Yahoo, Comcast and CNET. Oxygen will contribute short-form content including The Bad Girls Club, Fight Girls, 50 Funniest Women and Our Bodies, Myself. The new venture will also distribute Sundance Channel programming, including full-length original series, exclusive webisodes, short films, original short-form content shot exclusively for the Web and clips from feature films and documentaries. In addition to distributing content from TV Guide Broadband, the venture's destination site will offer short-form video content including: TV Guide's recommendations for the best shows, movies and music on television; interviews with top celebrities; behind-the-scenes from the hottest TV shows; and more. Launching later this summer, the venture will feature thousands of hours of full-length TV programming, clips and movies, representing content from 20 networks and major television and film studios. In addition, the venture has also signed non-equity content deals with CNET and Comcast, which has agreed to contribute content from E!, Style, G4, Versus and Golf Channel.

35.972M WINC AM & FM, WWRF-FM & WWRT-FM Winchester VA (Winchester, Berryville, Strasburg VA); and WFVA-AM/WBQB-FM Fredericksburg VA from Mid Atlantic Network Inc. (John P. Lewis) to Centennial Licensing II LLC, a subsidiary of Centennial Broadcasting LLC (Gordon Gray Jr., Allen B. Shaw, Stephen H. Watts, Howard Nemenz, Christopher Jarrell). 1.8M escrow, balance in cash at closing. Includes non-compete. Existing superduopoly in Winchester market. [File date 5/15/07.]

400K KAWV-FM Lihue HI from James L. Primm to Hochman Hawaii Four Inc. (George Hochman, William S. Poorman). 13K escrow, 7K advance payment, 30K cash at closing, 350K note. Superduopoly with KITH-FM Kapaa, KTOH-FM Kalaheo HI. LMA until closing. [File date 5/14/07.]

Stock Talk
Let the records fall!
Minutes released from the last Fed meeting didn't raise any hopes of a rate cut soon, but also reassured investors that the Fed isn't going to raise rates and that the economy is in generally good shape. The Dow Industrials rose to another record high, gaining 112 points, or 0.8%, to 13,633. The broader S&P 500 broke its record which had stood for more than six years, rising 12 points, or 0.8%, to an all-time high of 1,530. The Nasdaq Composite also had an up day.

Radio stocks, however, were pretty much flat. The Radio Index edged down a statistically insignificant 0.003 to 161.999, which is still nowhere near its all-time high of 289.720 set on December 29, 2003. Entravision had the best day, up 4.7%. Cumulus was down 2.3% as the worst performer.

Radio Stocks

Here's how stocks fared on Wednesday

Company Symbol Close Change Company Symbol Close Change













Journal Comm.







Lincoln Natl.







Radio One, Cl. A




Citadel CDL
8.65 -0.14

Radio One, Cl. D




Clear Channel








Cox Radio




Saga Commun.








Salem Comm.








Sirius Sat. Radio








Spanish Bcg.
















Westwood One








XM Sat. Radio














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Below the Fold
Ad Business Report
CBS-Last.FM deal a good move
Matt Feinberg, Zenith Media Services; Rich Russo, JL Media see their views as a good opportunity for the company...

Media Business Report
Newspapers tout online growth
Ad sales for print are still suffering, but the Internet side is the growth...

Media Markets & Money
Sandab reels in two
On the Cape and doubling the size of its cluster...

Entertainment Media
Business Report
Former US prosecutor
lands on Radio
KRLA-AM "News Talk 870" with former Assistant US Attorney Kevin James...

Stations for Sale

Market your Stations For Sale
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Radio Media Moves

Her Focus is Southeast
Kathleen Miller has been promoted to Southeast Divisional Manager at Local Focus, the division of Focus 360 serving radio clients outside major markets. "Kathleen has shown tremendous talent for developing new business for our portfolio of small and mid-market radio stations," said Local Focus President, Joan Gerberding. Miller joined Regional market Radio, the forerunner to Local Focus, in 2005 after several years at Interep.

Mars on the loose
Andrew Mars has left Liberman Broadcasting in Los Angeles after 18 years and says he is "reviewing options" for his next career move. "My sincere thanks to Jose and Lenard Liberman for the tremendous opportunity of growing in the Hispanic market and having the experience of both television and radio management under my belt," Mars said.

Quality control
Arbitron announced the promotion of Claudine Knisley to Director of Syndicated Standards and Analysis where she will manage Arbitron's Portable People Meter (PPM) and diary services' policies and procedures - continuing to meet established standards for high-quality practices. Knisley's additional role in the company is as a liaison between internal work groups such as Sales/Marketing and Research and Operations, and external customers such as radio stations and advertisers, for all Arbitron's local market syndicated services.

More News Headlines

Kaiser set to roll
out media study

The Kaiser Family Foundation has scheduled release of its latest survey involving health issues and the media for 6/19/07. Entitled Parents, Children & the Media: A Kaiser Family Foundation Survey, it will address numerous issues, including "media content, media ratings and the V-Chip, media monitoring, educational media, advertising, and the Internet." It proposes to address the following specific issues: * Has parent's concern about their children's exposure to potentially inappropriate content in the media changed over time? * Do parents understand and/or monitor what their children do on social networking websites? * Do parents believe that certain media is educationally beneficial for very young children? * How many parents actually use the V-Chip, or the TV ratings? * Do parents support or oppose policies to regulate the amount of sex and violence in the family hour?

TVBR observation: The two big children's topics on Washington radar screens this year seem to be obesity and violence. With the Senate Commerce Committee expected to reschedule a hearing on the latter some time in June, and with this now on the schedule, it looks like June is violence month. But Ed Markey recently asked the FCC to focus on the obesity issue, so watch for that one to crop back up soon as well.

RBR Radar 2007
Radio News you won't read any where else. RBR--First, Accurate, and Independently Owned.

PPM's impact on ratings
After looking at the first month of PPM data from Philadelphia, Bear Stearns analyst Victor Miller says radio may have to rethink how it sells itself to emphasize the greater audience reach than was ever reported by diaries. For one thing, he notes that Clear Channel's Philly cluster fell from #1 to #3 in ratings under PPM, but was still #1 in total cume. The big in-market gainers were Jerry Lee's WBEB-FM and CC Radio's WISX-FM, each up 193%, with CBS Radio's WOGL-FM close behind at 192%. "The cume data shows that radio stations have been underselling their reach to advertisers,"

RBR observation: This is the new world. Get used to it. We've heard varying reports on how ad buyers are adjusting to the new numbers resulting from PPM. Stations may have to stand their ground and turn down some business if some of those buyers insist on applying diary CPMs to PPM ratings.
05/30/07 RBR #105

Russo adds more items to
"soothsayer catalog"
Chalk two more successful predictions up for Rich Russo, JL Media's SVP/Director of Broadcast Services. "I need to go off on a rant here about NY radio and especially the CBS Radio debacle here. I am able to accept that replacing Stern is difficult, but I cannot accept with the amount of time they had, to have David Lee Roth come on the air so unprepared. It's unacceptable that this show is so un-listenable. It also beyond belief how bad Jack is doing here and how we have no true rock station here in NYC, WAXQ is OK for a classic rock station but really for lack of a better term is "Vasectomy Rock"

RBR observation: Wow and ouch and true. Read more from what Russo predicted and by the way for once we are glad it was Rich saying than RBR. But "Vasectomy Rock" sounds like a hurting format with guys having high pitched voices.
05/30/07 RBR #105

What if you gave a debate
and one candidate came?
Fox News is not a party of any of the six presidential debates sanctioned by the Democratic National Committee, but it did arrange to sponsor two, one to be held by the Democratic party organization in Nevada and another sponsored by the Congressional Black Caucus. The Nevada debate was pulled, but apparently the September-scheduled CBC event has at least one candidate committed to making an appearance, US Rep. Dennis Kucinich (D-OH). Leading candidates Hillary Clinton, Barack Obama and John Edwards have already indicated they will skip the event.

TVBR observation: It will be interesting to see if this event remains on the schedule and if it does, to see who actually shows up. Like a stateside PGA tour event when a lot of the top ranked players are overseas for the British Open, it may provide an opportunity for a second-tier candidate to leap out of the pack and grab the limelight.
05/30/07 TVBR #105

ABC Radio will be June bride
The nuptials are set for June 12th to unite ABC Radio with Citadel Broadcasting, joining the 22 big market ABC stations and ABC Radio Networks with Farid Suleman's Citadel Broadcasting to create the third largest US radio group in terms of billings, behind Clear Channel and CBS Radio. The parent of the bride, Disney, will not exit radio completely with this 2.7 billion bucks divestiture, since ESPN Radio and its O&Os and Radio Disney and its O&Os will remain with the company.

RBR observation: Why the huge dividend to Citadel shareholders? It's not because Farid Suleman has more money lying around than he knows what to do with. For this deal to be tax-free to Disney shareholders, they must end up owning more than 50% of the merged company. To balance the relative values of Citadel and the ABC Radio holding company, Citadel must take on more debt and make the payout to shareholders so that its total equity is slightly below that of the ABC Radio entity. Citadel's share price should drop in relation to the payout, but we and everyone else will be watching to see if that price moves back up quickly as Citadel becomes a much bigger player in the radio business, particularly in larger markets, and continues to pay a hefty regular dividend.
05/29/07 RBR #104

Tribune shareholders vote for cash
As we predicted, the Tribune Company tender offer for 126 million shares at 34 bucks each was waaaaay oversubscribed. The company says 224 million were tendered, which is 92% of all of the Tribune shares that exist. So, most of the shareholders who tendered will get to sell only about half of their shares - unless and until the FCC approves the license transfers and accompanying waivers of the crossownership rule so Sam Zell and a new Employee Stock Ownership Plan (ESOP) can complete their buyout of the public shareholders.

TVBR observation: This notion of "going private," while it clearly has some advantages, is not as easy as it might look. Read the memo and details in TVBR.
05/29/07 TVBR #104


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