Volume 21, Issue 109, Jim Carnegie, Editor & Publisher
Friday Morning June 4th, 2004

Radio News ®

Viacom to sell some radio stations
Viacom Chairman and CEO Sumner Redstone again ruled out selling all of Infinity Broadcasting, but he told an investment conference in New York yesterday that the company will sell off some underperforming radio stations. "We probably will sell some of those stations to others who are more avaricious about radio than we are," he told a Sanford C. Bernstein conference. "Radio is growing, but not as fast as we would like," Redstone said, adding that the radio business was not what it was when Mel Karmazin built Infinity. As for Howard Stern, who has publicly predicted his own ouster from the company now that Karmazin is gone, Redstone said he will back the shock jock. "We'll give him the support. I believe he will stay with us," the CEO said.

Internet, TV at the head
of the indecency parade
You wouldn't know it from a tally of FCC indecency fines, which have almost exclusively been charged to radio owners - - but the medium is far behind both the Internet and television as a purveyor of indecency in the minds of the public, according to a new study by Paragon Media Strategies. 51% of 401 respondents said the Internet contained the most indecent material. TV got top-billing from 35%. Radio, on the other hand, was cited by only 6%. Magazines were at 4%, newspapers at 1%. Television was the leader when respondents were asked if they had been exposed to indecent material in the last six months - - 63% said that was true of television programming. The rest of the list is as follows: email solicitations 53%; television ads 50; Internet ads 49; Internet websites 45; music on the radio 44; magazine ads 40; radio DJs/guests 37; magazine articles 34; radio ads 25; newspaper articles 25; and newspaper ads 21. Paragon's Mike Henry said, "By large margins, the Internet and television are deemed to be the most guilty media culprits, with radio a very distant third. When asked to specifically identify exposure to indecent material in the media, once again television and Internet content surpassed all mentions of radio."

May up 4.1% at Journal Radio
In its monthly revenue report, Journal Communications reports that radio revenues were up 4.1% to $6.4 million in May. TV revenues shot up 19.9% to $7.09 million. That took the total for Journal Broadcast Group to $13.48 million, up 11.8%. Publishing revenues rose 7.2% to $26.71 million.


Clear Channel, Nobody in Particular settle
Clear Channel and Denver concert promoter Nobody in Particular Presents have settled their antitrust lawsuit. (4/12 RBR Daily Epaper #71). Terms were not disclosed. Nobody in Particular Presents had alleged Clear Channel attempted to illegally monopolize the concert promotion biz in the Rocky Mountain state by withholding airplay from groups that booked with other promoters. The suit also claimed that Clear Channel stations do not accept paid ads by Nobody in Particular. Andy Levin, CC EVP/Chief Legal Officer, said a statement, "Clear Channel admitted no wrongdoing in connection with the lawsuit, but we are pleased to get the matter behind us."

MPAA looking for face value
In Washington, Jack Valenti is the movies. The Motion Picture Association of America exec has represented Hollywood in the federal city just about as long as anybody can remember. He's also 82 and looking to retire. According the the New York Times, MPAA is having a real problem is finding someone who can take his place.
RBR observation: We've already heard concerns from NAB members about what's going to happen when Eddie Fritts does retire, although it no longer looks like there's any possibility of that happening quickly. | More... | RBR Observation |

Satisfaction: Optimism on the upswing
A survey by the Harris Poll found that the number of people who said their lives have improved over the past five years has increased compared to the number who answered the same question last year. The number expecting improvement over the coming five years has also gone up. Concurrently, dissatisfaction has decreased. In April 2003, 49% agreed that things had gotten better for them over the past five years. 21% said things had gotten worse, and 63% expected improvement over the coming five years. The April 2004 survey results document the upswing in optimism. 56% said things had improved over the past five years, only 16% reported a decline, and 68% were expecting getter conditions over the next five years.


Measuring the Media Moguls

XM Satellite Radio: Hugh Panero, President & CEO

2003 stock performance: +877.32%
2003 CEO pay: +17.49%

Shareholders of XM Satellite Radio had a lot to celebrate in 2003, as their stock price skyrocketed 877.32%. As President & CEO, Hugh Panero saw his cash pay increase 17.49%. His salary grew $12,000 to $412,000 and his bonus jumped $112,000 to $412,000. Add in $4,500 in perks and his total pay was $828,500, up from $705.153. That was mere pocket change compared to his improving net worth. In the course of the year, the value of Panero's 978,796 shares of XM stock shoot from $2.6 million to $25.7 million - - and that's not even including another 544,167 in options which are not yet exercisable.
| More...
|


Adbiz ©

Steve Grubbs on the upfront - - Part II
As the official start of the television upfront launched just days ago, we thought we'd provide a bit of observation with a few lines from our upcoming interview with PHD CEO Steve Grubbs that runs in our August print edition: | More... |

US advertising market shows
strong start for 2004
Total ad spend for Q1 increased 9.6% to $31.5B compared to the same time period in 2003, according to TNS Media Intelligence/CMR. Almost all of the media measured by TNSMI/CMR experienced growth throughout the first quarter of 2004, with the Internet, National Syndication, Cable TV, National Newspapers, and Network TV showing double digit year-over-year gains. The Internet exhibited the most robust year-over-year growth posting a 28.1% increase to $1.8B in ad spending. The healthy spend total for the Internet is a strong indicator that the medium has become an established part of the advertising media mix. Other media showing strong year-over-year growth include National Syndication, up 16.7% to $947M, Cable TV up 16.3% to 2.9B, and National Newspapers up 14.6% to $774M. Network TV led in dollar spending for first quarter 2004, posting $5.6B, an increase of 11.5% versus Q1/2003. Spending in the pharmaceutical, domestic auto, motion picture and telecommunications services advertising categories fueled this growth. | Chart |

Cultura tapped by Cox Communications
as Hispanic AOR
Cable MSO Cox Communications announced its pick of Dallas-based Cultura Advertising as the company's Hispanic agency of record. Cox is the third largest MSO in the U.S. serving 6.7M customers in 22 states representing 26 cluster market areas. Cox's key cable markets include San Diego, Phoenix, Tucson, Las Vegas, Omaha, Oklahoma City, Northern Virginia, Rhode Island and multiple markets in Texas. Cultura will work with Cox to build awareness of and demand for its digital cable, digital telephone and high-speed Internet services among the Hispanic populations in its key opportunity markets. The campaigns will involve television, radio, print, direct marketing and grassroots promotions. While minority held, Cultura is an independent affiliate of Omnicom. Cox will join Cultura's roster of clients which includes: Lowe's Home Improvement, Mercedes-Benz, ACE Cash Express, Swift & Company, Kay Jewelers, Roche Diagnostics, MetroPCS, Presbyterian Hospital of Dallas, the United Methodist Church and PepsiCo (Hispanic media AOR).

Reyn Leutz tapped by Premiere
Reyn Leutz, Director of National Radio Buying for Mindshare, will join Premiere Radio Networks sales team in Chicago starting June 14--the same day Donald Trump's new "Trumped" feature begins and a couple weeks before Delilah moves over from Jones MediaAmerica. "Network radio is my passion," said Leutz, who has been at Mindshare for almost 20 years. "I've always enjoyed persuading clients about the benefits of network radio." Those clients include Sears, American Express, Novartis and Kimberly-Clark, to name a few. "Moving to the sales side of a business I love is the next logical career step for me, and I am delighted to have the opportunity to join the best sales management team in the business, selling the strongest programming in radio," he added. Leutz is married to the Director of New Product Development at Kraft Foods and has two children, ages six and four. They live in Wilmette, IL.


Media, Markets & Money tm

Clear Channel follows the letter of the Lawton
Arthur Patrick's Pat-Tower Inc. is selling its Lawton OK FM station, allowing the buyer to assemble a bona fide in-market superduopoly. It's not the buyer's first, superduopoly - - Clear Channel has quite a few others in its portfolio. The station is KVRW-FM. Clear Channel is getting it for $1.6M cash, which includes a non-compete. It will also LMA the station prior to closing. Clear Channel already has a pair of FMs in town, KZCD and KLAW. The cluster also has incidental overlap with a Wichita Falls TX combo, KWFS-AM & KNIN-FM.

Close encounter on the Mississippi
Max Media has closed on its big $43M acquisition of a group of Zimmer Radio Group stations, according to brokers at Media Services Group who handled the sale. The stations - - seven AMs and 10 FMs - - are on both banks of the Mississippi River in the Carbondale-Paducah-Cape Girardeau area. MSG's Bill Lytle, Bob Maccini and Stephan Sloan all had a hand in the deal.


Washington Beat

Less green for Greenwood Acres
Greenwood Acres Baptist Church, licensee of KASO-AM in Minden LA, has been hit with a $13.6K fine - - and their lesson is a reminder to all to make sure there is an effectively locked enclosure around the tower. That was only part of the story for Greenwood, however, which was also hit for omissions in its public file. The failure to have an effective lock on the gate at the tower site fence was only part of the problem. It could have been bolted, padlocked and chained shut, but none of these barriers would have prevented somebody from simply walking through a gaping hole that existed in another part of the fence. The final partial part of this story is the fine itself. $13.6K is only part of what the FCC originally levied. That number was $17K. Greenwood was given a $3.4K reduction based on meager operational income and a record of compliance with FCC rules and regs.


Transactions

$679K: KXGO-FM, KAJK-FM & KNCR-FM Eureka-Arcata CA (Arcata, Ferndale, Fortuna). 70% of Miller Broadcasting Company Inc. from Ronald W. Miller (70% to 0%) to Pattisoin Christensen (30% to 100%). Combination of cash and debt assumption. Based on formula in contract, cash payment as of 4/1/04 would have been $233,030. Market rated by Eastlan. [File date 4/28/04.]

$250K: WNMB-AM Myrtle Beach (North Myrtle Beach SC) from Fidelity Broadcasting Corporation (Jerome Bresson) to Norman Communications NMB Inc. (William D. Norman Jr., Linda Susanne Norman). Cash. [File date 4/28/04.]


Stock Talk

Stocks slide as traders await jobs report
Wall Street pros decided to wait for today's government report on the employment situation before staking out any new trading positions, so stocks slid yesterday in listless trading. The Dow Industrials finished with a loss of 67 points, or 0.6%, at 10.196.

Radio stocks were also lower. The Radio Index dropped 3.096, or 1.3%, to 243.828. Cumulus fell 3.5% to lead the retreat. Emmis was off 3%.


Radio Stocks

Here's how stocks fared on Thursday

Company Symbol Close Change Company Symbol Close Change

Arbitron

ARB

$39.65

+$0.20

Jeff-Pilot

JP

$50.97

-$0.25

Beasley

BBGI

$15.58

+$0.23

Journal Comm.

JRN

$19.04

+$0.16

Citadel CDL $15.58 -$0.35

Radio One, Cl. A

ROIA

$16.63

-$0.45

Clear Channel

CCU

$39.14

-$0.42

Radio One, Cl. D

ROIAK

$16.54

-$0.37

Cox Radio

CXR

$18.65

-$0.20

Regent

RGCI

$5.76

-$0.07

Cumulus

CMLS

$17.54

-$0.64

Saga Commun.

SGA

$18.41

-$0.50

Disney

DIS

$23.97

-$0.45

Salem Comm.

SALM

$29.99

-$0.27

Emmis

EMMS

$20.79

-$0.64

Sirius Sat. Radio

SIRI

$3.08

-$0.09

Entercom

ETM

$39.31

-$0.54

Spanish Bcg.

SBSA

$9.37

-$0.09

Entravision

EVC

$7.96

-$0.04

Univision

UVN

$32.42

-$0.42

Fisher

FSCI

$49.02

+$0.39

Viacom, Cl. A

VIA

$37.64

+$0.43

Gaylord

GET

$28.82

-$0.13

Viacom, Cl. B

VIAb

$37.18

+$0.38

Hearst-Argyle

HTV

$25.92

-$0.39

Westwood One

WON

$26.14

+$0.05

Interep

IREP

$1.90

unch

XM Sat. Radio

XMSR

$23.93

-$0.75

International Bcg.

IBCS

$0.03

unch

-

-

-

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RBR Radar 2004
Click on these issues for Radio News you won't read any where else. RBR--First, Accurate, and Independently Owned.

Redstone downplays radio sale notion
has poured cold water on rumors that the company might sell off its Infinity radio unit to former President Mel Karmazin or anyone else.
RBR observation: Les Moonves, who is now overseeing radio and outdoor as well as TV recently said he'd like to have more radio stations. He loves how cross-promotion helps launch new CBS shows and gives the TV network a leg up over arch-rival NBC, which has no radio stations at all. Redstone also said he never puts any stock in those silly rumors. (What on silly what?)
06/03/04 RBR #108

DTV battle lines over must carry
NAB contended that the Ferree DTV transition plan is against the interests of consumers, premature and unnecessary. NAB suggested that their previously offered plan, under which broadcasters could opt for either analog or digital must-carry immediately, would get the DTV transition into high gear well before 2009. Editor's note: It is all a consumer driven issue or an act of congress which ever comes first. 06/03/04 RBR #108

Measuring the Media Moguls - Westwood One: Norman Pattiz, Chairman
As non-executive Pattiz no longer runs day-to-day operations. We'd love to tell you about the paycheck of Shane Coppola, or Joel Hollander, but we can't. Believe it or not, Coppola is not a Westwood One employee. For his part, Pattiz was paid a salary of $492,000 in 2003, down 1.60% from $500,000 in '02. He got no bonus either year.
06/03/04 RBR #108

Zen Master's bus gets detoured
Was it old bad blood with Sumner Redstone, or new bad blood? Whatever the case, Mel Karmazin decided to hit the brake and use the emergency exit of his Zen Master bus. Karmazin departed from Viacom less than two weeks after Redstone told shareholders that all was hunky-dory. 
RBR observation: Did Mel decide to get out before the current upfront finishes short of expectations for CBS, or had he just finally had all he could take of Sumner? Here's what he told CNBC's David Faber off-air after his interview: "I'm taking the week off. I want to be a CEO, I'm looking for a job next week." Look for Sumner to make that situation worse by picking a favorite, then switching (maybe several times) and creating his own battles with each of them as he did with Mel, since, as we all know, Sumner doesn't really want to give up the reins in three years - - or 20 years.  06/02/04 RBR #107

Al Franken working for free
Air America star Al Franken tells the New York Times he's become an "involuntary investor" by agreeing not to draw any salary. The still-very-young net has replaced five top execs, been taken off the air in Chicago and AL and lost several crucial producers. 06/02/04 RBR #107


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