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Welcome to RBR's Daily Epaper
Volume 22, Issue 114, Jim Carnegie, Editor & Publisher
Friday Morning June 10th, 2005

Radio News®

"Cousin Brucie" heads to Sirius
It wasn't just wishful thinking when "Cousin Brucie" Morrow said he'd be back on the air soon, after Infinity dropped the Oldies format of WCBS-FM New York to create a "Jack" station (6/6/05 RBR #110). After more than 40 years as one of the most familiar DJs in New York, Morrow is going coast-to-coast via Sirius Satellite Radio. "This is one of the most exciting events of my career. I feel like I'm riding a rocket ship - - or should I say 'satellite'? I now have the opportunity with Sirius to reach the national audience I've always wanted to communicate with. Here comes the music!" Morrow said in Sirius' announcement of his hiring. Cousin Brucie will debut on Sirius during the 4th of July weekend with a special broadcast from the Rock and Roll Hall of Fame and Museum in Cleveland. After that, he will host three regularly scheduled programs each week, plus "numerous daily features," Sirius said.

RBR observation: Both Sirius and XM have been advertising heavily in newspapers this week in New York and Chicago, seeking to sign up Oldies fans upset by Infinity's blowing up of WCBS and WJMK. "What do New Yorkers do when their favorite music is taken away? They get Sirius," read a full-page ad in yesterday's New York Times that was addressed "Attention former 101.1 FM listeners." If terrestrial broadcasters leave such a big niche open in the nation's #1 and #3 markets, you shouldn't be surprised that the satellite guys are trying to capitalize on it. As for Cousin Brucie, why wouldn't he take this deal? Infinity certainly wasn't going to offer him anything approaching his former paycheck for doing an Internet-only radio show. And the folks at Sirius know that Morrow is known far outside of New York. Back in the heyday of WABC MusicRadio 77 he took calls from listeners from throughout the eastern US and Canada. Where else can Sirius get an Oldies host so well connected that he has personalized songs like this one from the Four Seasons

Dr. Randy: No deal has been done with Democracy Radio
Well, after all the hype yesterday on Randy Michaels and Stu Krane buying "The Ed Schultz Show" from Democracy Radio (6/9 RBR #113), when we finally got an email back from Randy on a quote request, we were blown away to hear NO DEAL HAS YET BEEN DONE. Wow. Democracy Radio apparently put out the press release prematurely. Michaels tells RBR: "I read the release. Those DR [Democracy Radio] people are something. Anything to put their spin on the story. I hope to get a deal done, but don't have one...I don't comment on deals in progress. I suggest you check with the source that gave you what you published. That source should be considered highly suspect in the future." And the source was Democracy Radio, via PR Newswire! So far, no return calls from Democracy Radio.

RBR observation: The good doctor has certainly opened a new practice and is anxious to get back to putting his healing talents back to work in radio, but he's very discriminating about what projects he takes on and what he thinks he can do with them. What remains to be seen is whether the guys at Democracy Radio may have killed the deal by jumping the gun. Or maybe Dr. Randy just wants to see them squirm a little while he wields his scalpel and extracts a few more concessions.

XM stores up more cash
XM Satellite Radio has piled up another 300 million in its coffers from a sale of 9.7 million new shares underwritten by UBS Securities. XM said it intends to use the proceeds for working capital and general purposes, possibly including launch payments for its fourth satellite in mid to late 2006, construction payments for its fifth satellite, paying for programming from outside providers and paying down debt.

RBR observation: XM claims it will go cash flow positive this year, but even if that happens (we'll believe it when we see it), that flow will be small at first. It still costs hundreds of millions to build and launch a satellite, so XM (and Sirius) face substantial costs in the years ahead just to stay in business. While many terrestrial radio stations are operating on towers older than any of their employees, the satellites used by XM and Sirius have a limited lifetime and have to be replaced at regular intervals. It's a big expense that never ends.

FCC candidate withdraws
Christine Kurth, Deputy Staff Director of the Senate Commerce Committee, won't be taking an open Republican seat on the Federal Communications Commission. Committee Chairman Ted Stevens (R-AK) confirmed late yesterday that Kurth has withdrawn herself from consideration for nomination to FCC. The problem was her husband's job as a consultant for telecommunications companies. Under a strict interpretation of the "covered relationship" rule, if Kurth became an FCC Commissioner, either her husband would have been required to cease work on behalf of his clients; or Kurth would have been required to recuse herself from various matters under the FCC's jurisdiction even in situations where her husband was not working on the particular issue. "While I am disappointed that Christine will not be joining the FCC, I am delighted to have her talents and expertise on the Commerce Committee as we continue our work on telecommunications issues," said Sen. Stevens.

FCC looks to streamline FM allotment process
The FCC's Media Bureau has put forth a number of proposals for public comment, based in part on suggestions from First Broadcasting, which would streamline the process of amending the FM Table of Allotments. It would make it much easier to change a station's community of license. It would also impose a temporary freeze on allotment filings to expedite elimination of the current backlog. The Commissioners agreed to the NPRM unanimously, although Kevin Martin, Michael Copps and Jonathan Adelstein all expressed the need for caution to make sure that FM service for small communities is not harmed by the changes. Highlights include: * Reducing a COL modification to the level of a minor change application for both AMs and non-reserved FMs; * requiring new allocation applicants to apply a Form 301 with filing fee to make sure such proponents are still around at auction time; * Limiting to five the number of other stations effected by a proposal without proof of compelling public interest; * seeking comment on moving a sole allocation to another community where it would also be the sole allocation. * The proposed temporary freeze is intended to whittle down a backlog of nearly 300 FM allotment dockets, and would include a temporary settlement window toward that end.

Cash and Kerry - -
more in the political category
An unusual political buy is in the works - - Sen. John Kerry (D-MA) wants to push legislation he's sponsored to provide health care to uninsured children, and the flight is designed to goad key Republicans in both houses of Congress to move it forward. Via his political action committee, according to the Associated Press, Kerry's flight will target both leaders, Rep. Tom Delay (R-TX) and Sen. Bill Frist (R-TN), as well as key Republicans on the Senate Finance and House Commerce committees in Maine, Mississippi and Pennsylvania.


U.S. ad spend rose 2.4% Q1
Advertising spending for Q1 rose 2.4% over the same period last year, due to gains across major media, according to preliminary figures released today by Nielsen Monitor-Plus. Advertising spending increased in almost all reported media, led by Spanish-Language TV, Cable TV, and Magazines. Network Radio and National Newspaper were essentially flat, while Coupon and the top 100 Spot TV markets showed declines. "Taking a closer look at Spot TV's performance for the quarter, the medium was down 3.9% overall; however, the smaller 101-210 DMAs experienced a steady 3.4% growth", said Jeff King, managing director of Nielsen Monitor-Plus. | Check out the Numbers |

CIBC World Markets:
Cable upfront tracking below expectations

CIBC World Markets announced they are cutting their 12-18 month price targets by 6% on average for the Entertainment companies, despite rolling forward their base earnings year for multiples to '06 from '05, in response to their lowered expectation for the Cable Network Upfront following discussions with several media buyers: "Our contacts suggest ABC's conservative pricing strategy is pressuring the Cable industry's pricing power. We now believe the Cable Upfront is tracking for a 6%-7% yr/yr dollar increase, not the high single/low double-digit that investors are anticipating or the 8% we previously expected. We take the weaker-than-expected Cable Upfront as another sign the U.S. ad cycle, excluding the Internet, is not cooperating in the third year out of recession. We believe this will limit multiple expansion and lead to a 0% to +30% relative valuation band to the S&P 500. The good news we offer in this note is that downside should be limited from here, given the stocks are now trading at just a 9% premium to the S&P 500 (vs. 40%-70% historically) but growing earnings at a 2x-3x faster rate."

Census Bureau: US Hispanic population passes 40 Million
The nation's Hispanic population reached 41.3 million as of July 1, 2004, according to national estimates by race, Hispanic origin and age released by the U.S. Census Bureau. Hispanics, who may be of any race, accounted for about one-half of the national population growth of 2.9 million between July 1, 2003, and July 1, 2004. The Hispanic growth rate of 3.6% over the 12-month period was more than three times that of the total population (1.0%). The Census Bureau estimates the number of Asians in the United States at 14.0 million, up 3.4%. | More... |

RBR/TVBR Special Report - look for it next Tuesday

Nielsen's Susan Whiting stands up for LPM
Nielsen Media Research President/CEO Susan Whiting took the time to face the toughest issues Nielsen is facing head-on in this special Radio and Television Business Report interview. She addresses the latest headlines: The letter from broadcasters criticizing LPM; fault rates; MRC accreditation; ratings shifts in LPM markets; claims of undercounting minorities; the threat of Congress getting involved, and more.

As you'll read in the exclusive pdf report, Susan also explained how Nielsen must continuously walk a very thin rope, trying to keep all sides happy: "What we're really trying to do, I think, is trying to manage each business issue. But going forward we have to keep up with a lot of new technologies while we're running the current business and I think that that's a challenge for any company who wants to enter this business. You have to measure 210 different markets, the national service, the national Hispanic networks. Keep up with all the demographic changes. Produce that data everyday and then invest and stay ahead of technology changes coming down the road from video on demand, to DVRs, to video games, to content going into other technology. It's a big opportunity, it's really interesting, but it's very complicated and it's expensive to stay ahead of it and keep investing in it."

Media Markets & MoneyTM
Local DA figures in station sales
Lane Broadcasting stations in the Wilkes Barre-Scranton market are being sold in an extremely unusual deal which will ultimately benefit the victims of owner Douglas V. Lane, according to the Scranton Times Tribune. The FCC still has to approve the sale, but a buyer has been found for WWDL-FM, WYCK-AM and WICK-AM - - Bold Gold Media Group, a partnership formed by area radio veteran Bob VanDerheyden and recording studio owner Vincent Benedetto. The value of the deal was not disclosed. Lane was charged with child molestation in March 2004 and convicted in March 2005. District Attorney Andy Jarbola says that proceeds from the sale in the "hundreds of thousands of dollars" will be transferred through his office to Lane's victims. Creditors will also be paid after the appeals process is completed, and any leftovers will be donated to sex-abuse charities, or may be used to start a new one. Lane was convicted of abusing at least six male teenagers, luring them to his stations with promises of employment. The deal represents Bold Gold's second foray into station ownership - - it is working toward closure of a 4M deal announced earlier this year for WPSN-AM/WDNH-FM in Honesdale PA, WYCY-FM in Hawley PA, and WDNB-FM Jeffersonville NY (3/10/05 RBR #49).

RBR observation: This plan is all well and good, but it is not exactly in the book of FCC standard operating procedure. Generally, a convicted felon is not considered qualified to sell, and we know of no mechanism which allows anyone, be it a law enforcement official or otherwise, to stand in for the convict. We will be very interested to see how this is filed, and what the FCC does with it once that happens.

Washington Beat
DTV tuner requirements moved forward
Electronics manufacturers and retailers were rebuffed by the FCC. Not only was their request for a delay on off-air DTV tuner mandates turned down, the FCC actually decided to move the date ahead by four months, and is proposing a new rule which would require 100% compliance by the end of 2006. As it stands now, all sets 36" or greater must have DTV tuners by the beginning of next month (7/1/05). Also on that date, 50% of all mid-sized models ranging from 24"-36" must also be so equipped. The Commission also moved up the 100% benchmark for 25"-36" from 7/1/06 to 3/1/06. Finally, the Commission is seeing comment on moving the 7/1/07 date for full compliance for all sets 13" or larger to no later than 12/31/06, and asked for comment on whether smaller-screened receivers should be included in the mandate. The item passed unanimously. The National Association of Broadcasters was delighted with the decision. Said President/CEO Eddie Fritts, "With today's decision, the FCC validates that the 'tuner mandate' is a powerful pro-consumer mechanism for moving the digital television transition forward. We salute Chairman Martin and other FCC commissioners for accelerating the original tuner schedule, and we strongly support the proposal to move up DTV tuner compliance for smaller TV sets. Allowing set manufacturers to continue selling analog-only TV sets only elongates the transition to digital."

LPTV auction process under way
Auction No. 81 is earmarked for 9/14/05, and the run-up to the auction begins with registration for the FCC's pre-auction seminar. That closes 6/21 for the 6/24 session. The Short-form (FCC Form 175) Remedial Filing window will be open from 6/24 through 7/8, upfront payments are due 8/12, and a mock auction is scheduled for 9/12.

4.4M WKHY-FM & WXXB-FM Lafayette IN (Lafayette, Delphi IN) from Stay Tuned Broadcasting Corporation (Robert E. Rhea Jr.) to WASK Inc., a subsidiary of Schurz Communications Inc. (John Trent). 400K escrow, balance in cash at closing. Includes non-compete. Superduopoly with WASK AM & FM, WKOA-FM. [File date 5/4/05.]

1.6M WMDB-AM Nashville TN from Babb Broadcasting Company (Morgan M. Babb) to Davidson Media Station WMDB Licensee LLC (Peter Davidson). 75K escrow, balance in cash at closing. Duopoly with pending acquisition of WNSG-AM. [File date 5/4/05.]

Stock Talk
Greenspan wows Wall Street
"Reasonably firm footing" is the terminology he used to describe the state of the US economy, but that comment from Fed chief Alan Greenspan in a Capitol Hill appearance was enough to excite stock traders. The Dow Industrials closed up 26 points at 10,503.

Radio stocks, however, were lower. The Radio Index slipped 0.599, or0.3%, to 206.278. Cumulus fell 3.7%, with no news to account for the drop. The day's best performers were Univision and Regent, each up 1.7%.

Radio Stocks

Here's how stocks fared on Thursday

Company Symbol Close Change Company Symbol Close Change













Journal Comm.




Citadel CDL
12.18 -0.03

Radio One, Cl. A




Clear Channel




Radio One, Cl. D




Cox Radio












Saga Commun.








Salem Comm.








Sirius Sat. Radio








Spanish Bcg.
















Viacom, Cl. A








Viacom, Cl. B








Westwood One








XM Sat. Radio




International Bcg.










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RBR Radar 2005
Radio News you won't read any where else. RBR--First, Accurate, and Independently Owned.

Radio blips onto WSJ radar
The Wall Street Journal has noticed. Although radio M&A activity has been dormant since the new millennium kicked off, at least in the bigger markets, whispers - - and even a few louder noises - - are being heard again, all the way up to and including the editorial offices at WSJ. Its list of potential sellers and buyers contained no surprises for broadcasters in the know. Prominent among the spinners were Viacom/Infinity, Disney/ABC and Pfaltzgraff/Susquehanna. Buyers mentioned included Cumulus, Cox, Citadel and Emmis. Clear Channel speculation is, of course, a non-starter since it's already maxed out in the big markets, for the most part. RBR observation: In the real world, stations are being traded, but most of the action is taking place in small markets. And while large markets are heard from on occasion, the properties involved are usually one of four types: niche operations, move-ins, fringe stations or non-coms. The stations we're talking about here are a completely different story. But if revenues remain sluggish, it may be some time before asking prices are congruent with the kind of numbers suitors are willing to put on a signed check. Stay tuned. 06/09/05 RBR #113

As predicted: Product
placements up for scrutiny
FCC Commissioner Jonathan Adelstein focused much of his attention on the increasing use of product placements - - weaving a product or service into the plot of a television show, whether it be fictional, reality-based or whatever. Here is what TVBR wrote in an observation: "It may soon come to pass that disclosure in the form of text scrolling down on third of the screen at the speed of light while a promo for a future show is occupying the other two thirds may be seen as inadequate." RBR observation: On 5/16, we also wrote, "Watch for this issue to come up big in the next few years." Needless to say, we continue to stand by that prediction.
06/09/05 RBR #113

#1 in media? (It's a trick question)
What's the most valuable media company in the world? If you answered Time Warner, you were right last week, but no more. As its stock price soared to a record high this week, Google claimed the title. MBR observation: Why does this have us thinking back to the 1980s, when Home Shopping Network was valued by Wall Street as being worth more than CBS? That, as we all know now, was silly, and HSN's bubble eventually popped. Now, it seems that every financial article you read about Google questions when its bubble will burst. Yes, it's a fine company with strong growth, but its stock price is way out of line with reality. But, for now, it's the most valuable media company in the world. 06/09/05 RBR #113

SBS charges Emmis with
FCC violation

Emmis Communications may be the tower landlord of KXOL-FM Los Angeles, but Spanish Broadcasting System (SBS) says that doesn't give it the right to say what the station can broadcast. SBS has gone to the FCC with a complaint, charging that Emmis is guilty of anticompetitive behavior by going to federal court with a lawsuit to force KXOL to drop its new Reggaeton/Hip-Hop "Latino 96.3" format, which Emmis claims competes with KPWR-FM in violation of KXOL's tower lease. "The Commission must stop Emmis's attempt to limit competition in the Los Angeles market. It should impose sanctions and rule that certain language in the Lease Agreement between the parties is unenforceable," attorney Bruce Eisen of Kay Scholer LLP wrote to FCC Chairman Kevin Martin on behalf of SBS. RBR sought a response from Emmis, but hadn't received one by deadline. 06/08/05 RBR #112

Latest RAEL study:
Radio ROI higher than TV
The Radio Ad Effectiveness Lab (RAEL) has released its third study, concluding that radio campaigns show significantly better ROI for advertisers than national television campaigns, and that radio moves products a full 49% better than television. The study looked at 30-second spots on both radio and television. All the television campaigns in this test had received favorable advance testing; none of the radio ads were pre-tested. For the complete findings see
06/08/05 RBR #112

Disney CEO-to-be Bob Iger downplays radio spin-off
The company (Disney/ABC) has done a good job of outpacing the marketplace in those businesses the last few years. Iger said there's no balance sheet need to divest anything. Still, he didn't rule out exiting some non-core businesses. "We're going to continue to look at divestiture possibilities...a spin-off of some sort or some other financial arrangement creating more value, we will do that with a non-core business. We talk about radio in that respect. No urgency, but under the right circumstances it's obviously something we feel we should consider seriously."
RBR observation: There is a big confidence builder for any employee or client to strive to ultimate success or doing business with Disney/ABC especially in radio.06/08/05 RBR #112

Infinity to spin fewer stations
Viacom Co-President/COO Les Moonves confirmed what's already been pretty well known in the radio industry - - that Infinity has cut back on plans to sell most of its radio stations outside the top 20 markets but currently having some conversations about getting rid of some of the smaller radio stations right now. "The 'Jack' format is something that we've used in LA and a few other markets. In LA, it went from 15th to third in total listeners in about a six-month period of time, so obviously this is a format that works exceedingly well. It's sort of like your own iPod. It does not have DJs. It has 1,200 of your top songs and the format has worked extraordinarily well. 06/07/05 RBR #111

Seeking Challenge
Professional communications executive with strong international media background seeking a new challenge. Prior experience includes: CEO& COO. See Positions Wanted

Mergers & Acquisitions
Firm Est. 1959 needs 'Rainmaker' in the Southeast and New England territory. Looking to get established in the media brokerage business this is the time.

GSM Opportunity with Emmis
Legendary KSHE-95 St Louis needs a strong GSM with minimum 5 years battle experience and NTR skills a plus. Generous benefits and compensation await. Are you ready for this challenge!

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