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Volume 24, Issue 107, Jim Carnegie, Editor & Publisher
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Friday Morning June 1st, 2007
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Radio News ®
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 Internet radio files
for Emergency Stay
An emergency stay request filed 5/30 in the U.S. Court of Appeals for the D.C. Circuit could delay the looming D-Day for Internet radio. The motion, filed by the Digital Media Association in conjunction with NPR, and the Small Commercial Webcasters, formally requests the court delay the implementation of a "radical and arbitrary" recording royalty rate increase imposed by the Copyright Royalty Board May 1. Legislation that would repeal the rate increase is pending in the Senate and the House, but may not be brought to a vote in either chamber before 7/15, the day the first payments for the newly increased rates for webcasters are due. "July 15th, D-day for Internet radio, is fast approaching," SaveNetRadio spokesperson, Jake Ward said, "and we are hopeful that today's motion for an emergency stay will afford the Internet radio industry crucial time to rehear this case. We have every confidence that Congress will continue to give the Internet Radio Equality Act the attention it deserves with the urgency it requires, as evidenced by the over 100 cosponsors who have signed on H.R. 2060 since its 4/26 introduction. SaveNetRadio and the millions of webcasters, artists and listeners we represent urge the Court to give this motion full consideration."
Big merger on Wall Street
Two big brokerage and investment banking firms with heavy involvement in the media sector are becoming one. Banking giant Wachovia Corp., which already owns Wachovia Securities, is acquiring AG Edwards for 6.8 billion bucks, creating the nation's second largest retail brokerage firm, behind Merrill Lynch. The combined firm will have 1.1 trillion bucks in client assets and nearly 15,000 brokers. It will be called Wachovia Securities, but the retail brokerage business will be based in AG Edwards' hometown of St. Louis. The research, investment banking, mutual fund and other businesses of AG Edwards will be merged into the existing Wachovia Securities structure. Under terms of the merger, AG Edwards shareholders will receive 35.80 cash and 0.9844 shares of Wachovia stock for each share of AG Edwards stock.
RBR observation: Did veteran media analyst Mike Kupinski at AG Edwards see this coming? He recently left for a new job at NobleFinancial after 23 years at AG Edwards. It was just last year that Wachovia cut costs by promoting Marcia Ryvicker and giving the heave-ho to veteran analyst Jim Boyle.
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Tender tally finale
If you tendered shares for the Tribune Company phase one buyout by Sam Zell and the new ESOP, you will get to sell approximately 57% of the shares you offered to sell at 34 bucks each. After counting all of the shares tendered - 218,132,108 - for the buyback of 126,000,000 and accepting all of the odd lots under 100 shares, Tribune says the proration factor for the rest of the shares tendered is 0.5771140650. In other words, 57.7% of the shares will be cashed out and the remainder returned to the current shareholders, who will remain shareholders until phase two gets regulatory approval (or they sell them to someone else in the stock market). For the shares accepted in the tender, Tribune said the cash payouts will be made promptly, no later than Tuesday, June 5th.
 Two more Dems opt out of Fox debate
The Congressional Black Caucus (CBC) has planned a Democratic presidential debate, earmarked for 9/23/07, to be held on the Fox News Channel (FNC). The good news: Joe Biden (D-DE) and Dennis Kucinich (D-OH) are in. The bad news: Two other candidates made it official that they do not plan to participate. Bill Richardson (D-NM) and Chris Dodd (D-CT) are the latest to opt out, joining the three candidates widely believed to constitute the top tier in the Democratic race, Hillary Clinton (D-NY), Barack Obama (D-IL) and John Edwards (D-NC). Longshot candidate and former Senator Mike Gravel (D-AK) has not yet said anything one way or the other. Fox recently held a Republican debate with 10 participants (and at least one more angry about being left off the bill), but the perception that Fox carries a Republican bias is credited with the mass snubbing on the Democratic side. According to the Associated Press, another debate being co-sponsored by CBC is scheduled for early 2008 on CNN. Although it does not appear on the list of DNC-sanctioned events, there have been no announced plans to skip that one.
RBR observation: Nor are there likely to be. No Democratic candidate can afford to anger such a strong segment of the Democratic base, which underscores just how polarizing FNC has become to the Dems. The boy who cried wolf ran into trouble, but the candidates who cry Fox seem to be getting away with it. At any rate, it will be interesting to see if the 9/23/07 event actually takes place.
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Alan Berg's murder mastermind dies in prison
White supremacist David Lane, convicted of masterminding the murder of KOA-AM Denver talk host Alan Berg in 1984, has died in a federal prison at age 68. The local coroner in Terre Haute, IN has ruled that Lane died of natural causes related to epilepsy, having failed to take his medication for some time. Lane had been sentenced to 150 years in prison in 1987 after being convicted of federal civil rights violations for the machine-gunning of Berg in the driveway of his Denver home, although the actual gunmen were never identified. The radio host had repeatedly criticized Lane and other founders of the white supremacist group branded "The Order" by the media. Lane and 19 other members of the group were convicted of conspiracy and racketeering charges in 1985, a year after Berg's murder, and Lane was tried two years later for the killing. In all, he was sentenced to 190 years in prison and served 22 before his death this week. Lane had continued to write from his prison cell on anti-Semitism, anti-Americanism and Wotanism.
 Antitrust lawyers assail XM/Sirius
Crowell & Moring was retained by the National Association of Broadcasters to look at the proposed merger of DARS competitors XM and Sirius satellite audio services. Like many other who have examined the proposal, they see it resulting in a government-sanctioned monopoly, and urge that it be rejected. The firm stated, "The proposed merger would replace this duopoly market structure, set up specifically by the FCC to ensure at least some level of process and service competition, with a monopolist in the downstream subscription market...that is unrestrained in its ability to harm competition. There simply is no 'fix' that will restore the competitive structure of this marketplace, and thus DOJ should challenge the transaction to preserve existing and future competition." On the critical issue of market definition, C&M notes that in the first place, it was determined at the birth of the satellite audio service that it was a separate marketplace from AM and FM radio, and two licenses were granted to assure competition. In the second place, internet-based services are not able to duplicate the mobility of DARS, nor are they likely to have the ability any time soon. In the third place, other audio devices like iPods and MP3s, like tape and CD players before them, are largely incapable of providing anything other than prerecorded programming.
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| Wall Street Media Business Report TM |
Sillerman and Fuller in buyout bid
It wasn't so long ago that Simon Fuller sold his 19 Entertainment to CKX Inc. Now, he and CKX founder Bob Sillerman want to buy out the public shareholders and take the company private. They've offered 13.75 per share, which is a significant premium over yesterday's closing price of 10.63, and values the company at around 1.3 billion. The board of CKX had been considering the proposal before it was publicly disclosed late yesterday and will meet again today. CKX, through 19 Entertainment, owns the rights to "American Idol," its most lucrative property. CKX also owns the name, image and likeness of both Elvis Presley and Muhammad Ali.
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Ad Business Report TM
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Keystone Light unveils new "Unsmooth Moments"
Mistaking a telephone conversation for a pick-up line. Doing a touchdown victory dance after running the ball into the wrong end zone. Decidedly unsmooth moments. Keystone Light comes to the rescue as the one thing that can be counted on to be consistently smooth. The always smooth beer is launching new TV, out-of-home, radio and online executions of its popular "Always Smooth. Even When You're Not" campaign. Keystone Light will bring its campaign to the online world through an advertising buy on Break.com. Keystone Light banner ads will direct consumers to Break.com where Break will post its user-generated videos of embarrassing moments. The campaign will runs from 5/25-8/25. In addition, Keystone Light will continue its partnership with Fox Sports Net's Best Damn Sports Show Period, The Speed Report and the Bob & Tom Radio Show by bringing daily unsmooth moments to audiences nationwide. In the new television spots, Keystone Light drinkers will be seen getting into unsmooth situations while trying to impress women in the beer aisle of a convenience store. The brand has also unveiled attention-grabbing billboards that appear to be posted upside down.
RAB and NAB "Get Out the Vote with Radio"
The RAB and NAB will present Get Out the Vote with Radio, a free half-day seminar for political consultants and strategists on Wednesday in D.C. The seminar will reveal how to use Radio's lifestyle-specific formats to target voters in ways that go beyond standard zip-code targeting practices and communicate political messages on a deeper, more personal level. The U.S. is made up of distinct audio neighborhoods, populated by Radio listeners who are personally and emotionally connected to their favorite stations. Drawn by similar interests, tastes, and social and political beliefs, audio neighborhoods of like-minded individuals spring up around the Radio experience, giving strategists an avenue to reach and communicate with specific groups of voters in a relevant and receptive environment. According to studies that have examined public reaction, there is a high-level of synthesis between listeners and the messages they hear in Radio's audio neighborhoods. Moreover, research on voter-response to political advertisements delivered in an audio neighborhood reveals that voters have a higher tendency to believe the content of the Radio political message. Voters also are more likely to feel an emotional bond or connection to the candidate, provided the message is delivered in an audio neighborhood whose listener profile matches that of the target voter group. This first joint venture between the RAB and the NAB is part of a pre-announced plan from the two national organizations to collaborate on initiatives that increase awareness of Radio.
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| Media Business Report TM |
 Regal Guest Response System offered in 114 theatres
Regal Entertainment Group announced 114 locations are now utilizing the Regal Guest Response System (RGRS). With RGRS, patrons can utilize an in-theatre paging device to alert management of any disturbances in an auditorium. In addition to Regal's existing program of auditorium checks by staff members, RGRS provides another way for management to be better informed and to react more quickly. "Our initial test of the Regal Guest Response System was a success, and we are happy to offer this service to more of our moviegoers. The Guest Response System works in combination with regular auditorium checks by our staff to assist managers in providing superior customer service," stated Dick Westerling, Regal Entertainment Group Senior Vice President of Marketing and Advertising. "We work hard to ensure the best possible moviegoing experience in our theatres, so if a guest has a concern, we want to know about it. With the Guest Response System patrons can be our extra eyes and ears to alert us if there is a disturbance without having to miss part of the show." Regal theatres participating in the Guest Response System invite selected patrons to carry a paging device with them into the auditorium. One patron may participate for each of the theatre's auditoriums and for each movie showtime. The Guest Response device is a hand-held pager with four buttons. Each button alerts local management of a different problem such as: sound, picture, piracy or other disturbance. When the patron pushes a button, a message goes to a pager worn by a manager which tells them the nature of the concern, and in which auditorium. Regal will continue to roll out the system as the program is further developed.
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| Media Markets & Money TM |
Still some spin left on ex-Emmis TVs?
According to reports, stations being run by Montecito Broadcast Group after being acquired in a transaction filed with the FCC 10/7/05 may be ready to sell again. The group, which bought the stations as SJL Acquisition/Blackstone, picked up KOIN-TV Portland OR, KHON-TV Honolulu HI & KSNW-TV Wichita KS (along with numerous satellites in Hawaii and Kansas) from Emmis Communications for 259M. Station management warned staffers that although there were no plans to sell the stations and no brokers have been retained, an offer from an undisclosed prospective buyer was determined to be too good to brush aside, and for that reason, the company has opened a window to see if there is any competing interest in the station trading marketplace. Montecito management put out word of the situation to make sure employees did not find out about it via rumors on the street.
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| Washington Media Business Report TM |
 All quiet on the FCC front
The FCC tabled an agenda item which would have looked into market designations for the carriage of broadcast stations on MVPDs at yesterday's open meeting. That left the largely secondary issue of EAS regulation as the item of most interest to broadcasters. The FCC acted to make sure that upcoming FEMA regulations are put in place within 180 days of adoption by the emergency response agency for the purpose of ensuring that a new, state-of-the-art next-generation EAS system is up and running as fast as possible. Wireline video providers are included in the system. The item almost completely ignored its title issue - it was entitled "Review of the Emergency Alert Systems (EB Docket No. 04-296); Independent Spanish Broadcasters Association, the Office of Communication of the United Church of Christ, Inc., and the Minority Media and Telecommunications Council, Petition for Immediate Relief." Since that issue was already the subject of an ongoing proceeding, mention of that fact was as far as the Commission got on the topic on this occasion. Commissioner Jonathan Adelstein said it should nevertheless have been handled during the meeting. Adelstein also applauded the voluntary efforts of the NAB and MMTC to settle the issue.
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| Ratings & Research |
P1s still matter...a lot!
Look for a research study coming out this summer that will show just how important listener loyalty and preference is, even with the ratings transition from diaries to PPM. Researchers from DMR, Arbitron and the University of Wisconsin's AC Nielsen Center for Marketing have analyzed over one year's worth of daily panelist-by-panelist level data from Houston PPM. According to DMR's Tripp Eldredge, one key finding is that heavy radio users drive nearly 90% of the ratings. And even among P1s, some listeners matter more than most. Even so-called "mass appeal" stations derive the majority of their listening from a very small, important group: less than 2% of the Houston market drives nearly half of the listening for a leading AC station. "Understanding P1 listening is crucial for radio programmers and this study will provide fresh insight into the dynamics of how it works in the PPM world," said Bill Rose, Sr. VP of Marketing for Arbitron.
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| Music Media Business Report |
 Terra Firma bid on firm grounds
The UK private equity firm Terra Firma closed on its latest fund, raising 3.7 million British pounds, some of which will be used to fund its acquisition of EMI Group (5/22/07 RBR #100). Somehow, a writer for the UK website The Register took that to mean that the entire 3.7 billion would go to buy EMI and wrote a completely off-base story that Terra Firma had increased its bid by a billion plus, even though its previous bid of 2.4 billion pounds (4.7 billion US bucks) had already been accepted. The error was then picked up and repeated by the US website AllAccess. Rest assured, Terra Firma's bid for EMI is not going to be boosted just for the sake of throwing more money around. Meanwhile, the private equity firm has set a deadline of June 27th for shareholder acceptances of its EMI buyout bid. Rumors persist that a topper bid could yet be coming.
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| Transactions |
452.1M KTZN-AM/KGOT-FM/KBFX-FM/KASH-FM/KENI-AM/KYMG-FM Anchorage AK; WKCG-FM, WFAU-AM/WABK-FM, WTOS-FM, WRKD-AM/WMCM-FM, WCME-FM, WIGY-FM & WQSS-FM Augusta-Waterville ME (Augusta, Gardiner, Skowhegan, Rockland, Boothbay Harbor, Madison, Camden ME); WABI-AM/WWBX-FM, WKSQ-FM, WBFB-FM, WGUY-FM, WVOM-FM, WFZX-FM & WLKE-FM Bangor ME (Bangor, Ellsworth, Belfast, Dexter, Howland, Searsport, Bar Harbor ME); WINR-AM, WENE-AM/WMRV-FM, WKGB-FM, WMXW-FM & WBBI-FM Binghamton NY (Binghamton, Endicott, Conklin, Vestal, Endwell NY)....
| There's Alot More Here |
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| Stock Talk |
Not much movement
Wachovia's 6.8 billion buyout deal for AG Edwards wasn't enough to drive the entire market higher. Rather, traders were a bit disappointed by the government's estimate that Q1 GDP growth was only 0.6%. So, the market closed mixed. The Dow Industrials retreated five points to 13,628, but the S&P 500 and Nasdaq Composite were up a bit.
Radio stocks were also mixed. The Radio Index slipped 0.479, or 0.3%, to 161.520. The big loser was Citadel, down 4.1%. Entravision gained 2.4%.
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| Radio Stocks |
Here's how stocks fared on Thursday
| Company |
Symbol |
Close |
Change |
Company |
Symbol |
Close |
Change |
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Arbitron
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ARB
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52.36
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+0.50
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Hearst-Argyle
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HTV
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26.00
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-0.65
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Beasley
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BBGI
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8.59
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-0.04
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Journal Comm.
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JRN
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13.75
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+0.10
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| CBS CI. B |
CBS |
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33.26
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-0.09
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Lincoln Natl.
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LNC
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72.50
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+0.25
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| CBS CI. A |
CBSa |
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33.23
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-0.08
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Radio One, Cl. A
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ROIA
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7.50
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-0.05
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| Citadel |
CDL |
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8.30 |
-0.35 |
Radio One, Cl. D
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ROIAK
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7.51
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-0.03
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Clear Channel
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CCU
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38.40
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-0.02
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Regent
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RGCI
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3.45
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+0.04
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Cox Radio
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CXR
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14.68
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+0.09
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Saga Commun.
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SGA
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9.28
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+0.13
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Cumulus
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CMLS
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9.38
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+0.04
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Salem Comm.
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SALM
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12.10
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-0.36
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Disney
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DIS
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35.44
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-0.47
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Sirius Sat. Radio
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SIRI
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2.93
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unch
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Emmis
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EMMS
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10.39
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+0.06
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Spanish Bcg.
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SBSA
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4.73
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-0.02
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| Entercom |
ETM
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26.60
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-0.25
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SWMX
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SMWX
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0.25
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+0.02
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Entravision
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EVC
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10.19
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+0.24
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Westwood One
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WON
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8.06
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-0.10
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Fisher
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FSCI
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50.21
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+0.06
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XM Sat. Radio
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XMSR
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11.58
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-0.24
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Google
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GOOG
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497.91
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-0.69
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Bounceback
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 We want to
hear from you.
This is your column, so send your comments and
a photo to [email protected]
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Below the Fold
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Ad Business Report
RAB and NAB
Get Out the Vote with Radio free half-day seminar for political consultants and strategists...
Media Markets & Money
Still some spin left
On ex-Emmis TVs? According to reports stations being run by Montecito getting ready...
Music Media Business Report
Terra Firma bid on firm grounds
RBR has the details correct...
Ratings & Research
P1s still matter...a lot!
Study coming out will show just how important...
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Stations for Sale
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 Market your Stations For Sale
in our daily epapers.
Contact
June Barnes
[email protected]
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Radio Media Moves
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 Nahigian to Philly
Former Sporting News Radio Program Director Matt Nahigian has been named PD of Greater Media's WPEN-AM "Sports Radio 95" Philadelphia. He begins the new job June 11th.
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More News Headlines
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Teletubbies to be busted
The Teletubbies are back in the news already. A group called Public Advocate, a 501.c.4 non-profit group which claims to fight for the American family, is using the children's program stars to make a point. The Teletubbies and a man claiming to be Moses will be making the rounds outside Senate office buildings today, and at high noon, some other individuals identifying themselves as Thought Control Police will arrest them for thinking up such things as the Ten Commandments and - well, Public Advocate didn't really get around to explaining what the Teletubbies are thinking about. But it's all to protest The Local Law Enforcement Hate Crimes Protection Act, which would apply hate crime statutes to certain incidents involving homosexuals, which the group opposes, saying it amounts to the "...creation of a new thought crime" and which it calls part of "...the absurdity of the left's assault on the religious liberties." A spokesperson for the group said, "We cannot simply allow Christians, Moses or Teletubbies to say any thoughtful, politically incorrect statements."
RBR observation: We certainly don't intend to get in the middle of this debate, other than to note that, thanks to the freedoms enjoyed by citizens of the US, Public Advocate is in fact able to express its thoughts on this issue openly and in public, even though in doing so it may well slow down foot traffic in an area we often find ourselves rushing through to meet yet another deadline. All we know is that if it's true that there's no such thing as bad publicity, it will be yet another positive day for the Teletubbies, and quite possibly a great relief for Tinky Winky not to be singled out for once.
Beasley adds Mancow to WWDB-AM
A clarification from yesterday: Talk Radio Network-FM's Erich "Mancow" Muller has added another station, WWDB-AM Philadelphia (not FM), to his affiliate list. WWDB is the seventh major market to be added in recent months.
Bancrofts taking bids
Bancroft family resistance to Rupert Murdoch's bid for Dow Jones & Co. is crumbling. The family announced late yesterday that it will meet with representatives of News Corporation to discuss the five billion bucks takeover bid. The statement from the Bancrofts, however, indicated that they will consider other bidders and options for the company, which includes the Wall Street Journal as its marquee property.
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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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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. (More details in RBR)
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.
05/31/07 RBR #106
CBS Corp. acquires Last.FM
CBS Corp. has acquired Last.fm, a global, community-based, music discovery network, for 280 million in cash. Founded in 2002, the company creates communities around music by bringing together listeners, artists and music.
RBR observation: Most of the CBS Radio websites are not 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. (Note: See agency comments in Ad Business Report section in this issue of RBR)
05/31/07 RBR #106
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%.
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. (Note: details see Media Business Report section)
05/31/07 RBR #106
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,"
05/30/07 RBR #105
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Hard finding that key person
to fill the important position at your organization? Media HeadHunters is the place that key media firms use to get results. See Media HeadHunters and get results with service--Period.
Need assistance
contact Cathy Carnegie
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