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Welcome to RBR's Daily Epaper
Volume 23, Issue 120, Jim Carnegie, Editor & Publisher
Tuesday Morning June 20th, 2006

Radio News ®

Univision bids due today
After being pushed back to give bidders more time to put together their offers (6/6/06 RBR #110), bids for Univision are due today. Don't expect to hear anything official about the bids or bidders, at least not from Univision. The company is so tight-lipped that we will be surprised if it even issues a notice that the bids have been received. It has not, in fact, ever publicly stated that today is the due date. With the Cisneros Group, which owns Venevision, having last week joined the bidding group that already included Televisa, that group would appear to have an advantage going in, since Televisa and Venevision collectively already own more than 20% of Univision and are its two main program suppliers. Their other bidding partners are KKR, Bain Capital, Carlyle Group, Blackstone Group and Bill Gates' personal investment company, Cascade Investment. The other group known to be preparing a bid includes media billionaire Haim Saban, along with Madison Dearborn, Providence Equity Partners, Thomas H. Lee Partners and Texas Pacific Group. There have been rumors that a third bid may be submitted, perhaps from a major media conglomerate, but no name has emerged to lend credence to the rumors. If all goes well for Jerry Perenchio and his fellow shareholders, Univision may command a price tag in the area of 13 billion.

RBR observation: The latest development in the Univision auction is a Reuters report that some TV owners plan to challenge the FCC license transfers if the Televisa-Venevision group wins - not because of them, but because of their backers. KKR, Carlyle and Blackstone are also part of the Valcon group which recently acquired VNU, the owner of Nielsen Media Research. The TV groups are afraid of a conflict of interest, with major owners of a TV network operator also being major owners of the primary TV ratings company. Thomas H. Lee Partners is also a Valcon investor, but its relative control of the rival Univision bidding group would be less significant. In any case, we wonder just what grounds could be used for such a license transfer challenge. Nielsen is not licensed by the FCC and there is no such thing as a ratings-broadcasting crossownership rule.

An up month for Tribune
CEO Dennis FitzSimons has been in need of some good news as he battles dissident shareholders who want to break up the company, so he can be happy that revenues for the company were up 2.1% in May to 467 million. Gains were posted by all units, with the beleaguered TV group boosting revenues 0.9% to 107.3 million. Even so, TV is still down 1.4% year-to-date. In TV the company noted improvement in autos and strength in telecom and financial/professional services, while there was weakness in retail, restaurant/fast food and movies. Radio/entertainment revenues increased 7.6% to 30.6 million, with the gain attributed to the Chicago Cubs having more home games for the month this year. Year-to-date radio/entertainment revenues are down 3.5%. All in all, Broadcasting & Entertainment division revenues were up 2.3% in May to 138 million, but down 1.6% year-to-date. Publishing had a strong month, with ad revenues up 3.6% to 264.8 million. Classified rose 6.6%, retail gained 3.7% and national was off 1.3%. Year-to-date newspaper ad revenues are up 0.4%.


Martin pulls back on multicast
The excitement level for the FCC Open Meeting scheduled for Wednesday, 6/21/06 will have to be downgraded. Chairman Kevin Martin has pulled a revote on multicast must-carry from the agenda. There should still be plenty of interesting fare left, however, as the kick-off of media ownership rules reconsideration moves to center stage. "There did not appear to be consensus for moving forward at this time," said FCC spokeswoman Tamara Lipper, commenting on the multicast deletion. The National Association of Broadcasters quickly announced that fully planned to remain on the case. SVP Corporate Communications Dennis Wharton said, "A multicasting rule would provide an explosion of free local program choices for consumers, including public interest programming. If consumers are to enjoy the full benefits of digital television, cable operators must not be permitted to strip out the full DTV signal for anti-competitive purposes. We appreciate FCC Chairman Martin's steadfast support for more program choice, and we will continue to educate policymakers on the pro-consumer benefits of multicasting."

RBR observation: This probably tells us two things. Remember that the last time this came up for a vote, Martin was the only one for it. That means two Republicans, Michael Powell and Kathleen Abernathy sided with cable before. At least one if not both of the new GOP members must be at a minimum thinking about taking that same position in opposition to Martin, or else he'd be able to push his plank through without help from the two Democratic commissioners. We would guess that the two Democrats, who indicated last time that they'd be willing to support multicast if public interest requirements came along with it, may be holding on to a valuable bargaining chip as the ownership remand comes front and center.

No concensus in Senate Commerce over net neutrality
Reuters reported over the weekend that Senate Commerce Committee Chairman Ted Stevens (R-AK) was set to offer a compromise on the issue of network neutrality, a major sticking point in the effort underway to revamp the Telecommunications Act of 1996 in such a way as to grease the wheels for telephone companies to offer serious competition to the cable television industry. According to Reuters, Stevens would assure that websurfers could go wherever they choose, but did not go nearly as far as some content providers want. Nor did it go far enough to suit Commerce ranking member Dan Inouye (D-HI), who said, "Regrettably, we believe the latest draft of communications legislation marks a further step backward for consumers, and it calls into question our commitment to passing a bipartisan communications reform package in this Congress." Inouye had a number of complaints, and said this regarding net neutrality: "...the new draft's provisions on net neutrality utterly fail to protect consumers and preserve an open Internet. Under the current language, network operators will have the ability to dictate what the Internet of the future will look like, what content it will include, and how it will operate. In the absence of meaningful consumer protections, network operators will have the unfettered capacity to discriminate against unaffiliated online content, degrade their quality of service, or impose steep charges for prioritized traffic."

RBR observation: There is little doubt that the telco's much-desired national franchising system could pass with widespread support from both sides of the aisle. When it comes to network neutrality, however, all bets are off. It is possible Inouye will have more support come his way from across the aisle than will Stevens. Mark-up of the bill is scheduled for Thursday afternoon. It will be interesting to see if this issue hangs up the entire bill.

Lee Facto passes
RBR has learned of the recent death of Lee Facto, who had retired in 2002 after helping to build RCS (first called Radio Computing Services) from a tiny, five-person company to the major player it is today. During his two decades plus at RCS, Facto wore a number of hats, at various times heading administration, sales, international development, finance and more. Lee Facto, who was 72, is survived by his wife, Anne, and their two sons.


Wall Street Media Business Report TM
Calling all VNU bondholders
Valcon may now own about 99% of VNU, but there is still some housekeeping to do in connection with the equity buyout. Holders of the company's 150 million euros worth of extendable floating rate notes due September 28, 2006 have approved new terms and conditions allowing for VNU to redeem the notes early. Meanwhile, though, a meeting of holders of 600 million euros in 6.75% notes due October 29, 2008 failed to achieve a quorum. So, a new meeting of noteholders has been called for July 4th.


Ad Business Report TM

Give me good radio!
We asked a few on the agency side what radio could do better-on the content side or behind the scenes-to make their clients happier-or they, themselves, as listeners. Continued from yesterday. (from June's RBR/TVBR Solutions Magazine)

Kim Vasey, Senior Partner/Director of Radio, mediaedge:cia:
"Perhaps it's because I always try to see the glass as half full instead of half empty but I say that good radio is alive and well and has been around for years. I have too many success stories to believe otherwise. But that's not to say that a good thing can't get better. And I believe all of the efforts put forth by the broadcast groups to improve our medium can only serve to make an even stronger case for the value of radio as an efficient, effective and powerful advertising medium for our clients. I say "bravo" to the radio broadcasters for addressing the concerns of the agencies and clients that voiced their opinions on the issues of clutter, lack of choice, research and accountability. Things have been tough in the industry but positive results are often born out of trying times and we have our work cut out for us. I am delighted to be able to share with our clients the responsible steps that the broadcast groups have taken to address some of these issues. And, I'm impressed with the consolidated effort that the industry, at large, has made in recognizing the need to bring more choices through HD radio and new listening devices in order to keep current with the listening habits of today's consumers. Less clutter, new research studies through RAEL, and serious discussions on the topic of accountability between the broadcast groups and agencies all advance the credibility of the industry and empower us with an even stronger case for radio. More choices through HD radio and new applications through streaming content, podcasting and digital text messaging allow for added touch points to reach the consumers throughout their day with radio. Yes, good radio is alive and well today but great radio is the forecast for the future. I'm a proud to be a part of it and to lend my voice to help make "good radio" even better."

L'Oreal Paris chooses R/GA for interactive agency
L'Oreal Paris announced R/GA as its interactive agency of record worldwide, handling the interactive advertising duties for L'Oreal Paris for all its categories - cosmetics, skincare, haircolor and haircare. R/GA was awarded the account after a comprehensive six-month review. Engagements will include brand campaigns, global web presence, eCRM programs, and emerging media, such as mobile marketing and interactive television.

AMA calls for temporary moratorium
on DTC advertising of new prescription drugs

The American Medical Association (AMA) announced a new policy on direct-to-consumer advertising of prescription drugs and implantable medical devices. The new policy includes imposing a temporary moratorium on the advertising of newly approved drugs and guidelines for pharmaceutical companies to follow when preparing DTC advertising.
| Read More... |


Media Markets & Money TM
Armada expands its fleet
Former Wisconsin Governor Tommy Thompson's radio venture Aramada Media Corporation has struck again, entering the ranks of radio grouphood (at least on an announced basis). It is picking up seven stations in the northern reaches of the Midwest from David Winters' Quicksilver Broadcasting for 8.5 dollars. Coming in the deal are WJMS-AM/WIMI-FM in Ironwood MI, in the extreme northwest corner of the state's Upper Peninsula not far from Lake Superior. Also coming, at the extreme southwest corner of the Upper Peninsula, just off Green Bay which is just off Lake Michigan, will be WAGN-AM/WHYB-FM in Menomonie. And the deal will also include three stations just across the border and into Wisconsin, WMAM-AM/WLST-FM Marinette and WSFQ-FM Peshtigo. According to W. Donald Roberts Jr. of Kozacko Media Services, who brokered the deal, the Ironwood cluster combines a Country/Talk AM with a Hot AC FM. The five station cluster on the other side of the peninsula features sports and Standards on the AM side, along with Hot AC, Country and Oldies on the FM. Armada earlier paid 9.25M for a six-station cluster in and around Aberdeen SD. So far, its acquisitions have not taken the group into Arbitron-rated territory.


Washington Media Business Report TM
Kevin Martin: Maverick
If you have been dreaming about what FCC Chairman Kevin Martin would look like watching two guys play cards in the upper floor of a fancy Washington hotel, then you'll just have to run out and get a copy of the June/July issue of Details. He is one of the 21 in an article called "Mavericks: Forget the New Establishment. Meet the 21 People Who Are Quietly Shaping Your World." The card players are telecom lobbyist Alex Vogel and XM exec Eric Logan. There isn't much in his brief profile which isn't general knowledge to people who visit RBR's corner of the Internet every morning. He is touted as the "Harry Potter of the Beltway," in part for his looks and in part for his "wily political mojo." He is cited as a deregulator and an indecency cop. Quote: "Getting the government out of the way is one of the most important things we can be doing." It's not clear what he's doing standing on the bed. He's certainly not dressed for bed. He lacks a coat and tie, but otherwise is attired in standard Washington blue/dark. Is he signaling the contents of Logan's hand to Vogel? Is he planning a leap for glory onto the pile of undealt cards on a little table at the foot of the bed? Maybe we'll all be clued in at the Open Meeting on Wednesday...


Internet Media Business Report TM
National brands choosing
CC Radio's online net

National brands are increasingly choosing Clear Channel Radio station Web sites as ad vehicles, the company announced. Led by the food & beverage and automotive categories, current national-brand ads also promote telecommunications and cable services, entertainment and media content, and consumer goods. According to data from ComScore/Media Metrix, the sites now draw more than 7.8 million unique visitors each month (placing it fifth among all online music networks). Further, those visitors generate 1.6 million unique station-broadcast streams (placing it third among all online music networks) and some 1.9 million on-demand plays of both audio and video content. The network's audience has grown 10% since January of this year, with the increases in unique streams and on-demand plays topping 420% and 1319%, respectively. The most prevalent brand group currently advertising is food and beverage. Now playing on OM&R sites: Oreo, Hershey's, McDonald's, Coca-Cola, Corona, Budweiser, Arby's, Cold Stone Creamery, Dodge, Ford, Honda, Mercedes Benz, Pontiac, Geico, Verizon, Virgin Mobile, Comcast, Charter, Time Warner Cable, Warner Bros. Records, BET, RE/MAX, NBC, Lifetime, Sony PlayStation, Radio Shack, TurboTax, and Travelocity.


Ratings & Research
Arbitron ups RADAR sample size to 125,000
Further increasing the reliability and stability of its RADAR network ratings, Arbitron announced it will boost the sample size of RADAR by 25% from 100,000 to 125,000 diarykeepers. In addition, this increase in RADAR sample size will allow Arbitron to expand the Market by Market Reporting tool, which currently reports the top 25 DMAs, to the top 50 DMAs by September. Starting with the release of RADAR 89 in June 2006, more than 6,000 diaries were added to the sample of the most current quarter of the report, going from the current sample size of 100,000 diaries to 106,299 diaries. By the release of RADAR 92 in March 2007, RADAR will be based on an annual sample size of 125,000 diarykeepers.


Sales
Scholarship committee named
RAB and BMI announced the selection committee members for this year's FastStart to Radio Sales Success minority scholarship program. The committee will select 25 minority students to attend the Gary Fries Radio Advertising Bureau Radio Training Academy in Dallas, TX, or the Academy Off-Campus Extension Program within the next 12 months. By the way, applications are due June 30th. The 2006 FastStart to Radio Sales Success selection committee includes:
| Read More... |


Transactions
1M WNLE-FM Jacksonville FL (Fernandina Beach FL) from Nassau Baptist Ministries (Truman Blankenship) to West Jacksonville Baptist Church Inc. (Rodney Kelley, W.W. Meeks, Tommy Sapp, George Smith). 50K escrow, balance in cash at closing. Seller has two-year right of first refusal to repurchase station. [File date 5/26/06.]

475K WOHT-FM Grenada MS from Century Broadcasting LLC (Steven White) to Ram Media Partners LLC (Randolph Miler, Jeffery Solima). 23.75K deposit, balance in cash at closing. LMA until closing (1.5K per month plus expenses). [File date 5/26/06.]


Stock Talk
Another day of jitters
Worries about the Fed, rates and oil prices sent stocks lower on Monday. The Dow Industrials dropped 72 points, or 0.7%, to 10,942 - back below the 11K mark.

Radio stocks were no exception. The Radio Index declined 2.096, or 1.4%, to 147.338. Beasley dropped 5.2% and Salem fell 3.8% as the worst performers.


Radio Stocks

Here's how stocks fared on Monday

Company Symbol Close Change Company Symbol Close Change

Arbitron

ARB

37.05

-0.51

Hearst-Argyle

HTV

21.95

+0.13

Beasley

BBGI

6.58

-0.36

Journal Comm.

JRN

11.09

-0.11

CBS CI. B CBS

25.96

-0.03

Lincoln Natl.

LNC

55.39

-0.56

CBS CI. A CBSa

25.97

-0.03

Radio One, Cl. A

ROIA

6.89

-0.04

Citadel CDL
8.69 -0.22

Radio One, Cl. D

ROIAK

6.88

-0.13

Clear Channel

CCU

29.81

-0.05

Regent

RGCI

3.60

-0.18

Cox Radio

CXR

13.58

-0.06

Saga Commun.

SGA

9.33

+0.02

Cumulus

CMLS

10.45

-0.27

Salem Comm.

SALM

13.12

-0.52

Disney

DIS

29.07

-0.38

Sirius Sat. Radio

SIRI

3.98

-0.09

Emmis

EMMS

16.19

-0.26

Spanish Bcg.

SBSA

5.20

-0.04

Entercom

ETM

24.72

-0.39

Univision

UVN

35.70

-0.05

Entravision

EVC

8.24

+0.12

Westwood One

WON

7.65

-0.07

Fisher

FSCI

42.80

+0.04

XM Sat. Radio

XMSR

13.23

-0.37

Gaylord

GET

40.84

-1.42

-

-

-

-

-


Bounceback

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Below the Fold

Media Business Report
Calling all VNU bondholders
There is still some housekeeping to do...

Ad Business Report
Give me good radio
Kim Vasey, mediaedge:cia "I always try to see the glass as half full instead of half empty..."

Media Markets & Money
Armada expands its fleet
Picking up 7 stations in the northern reaches of the Midwest...

Washington Media Business Report
Kevin Martin: Maverick
Like watching 2 guys play cards in the upper floor of a fancy DC hotel...


Arbitrends

Arbitron
Market Results
| Hamptons |
| Middlesex |
| Nassau |
| New York |
| Riverside |

NBA Minute


Stations for Sale

FM Stations
Nevada Boomtown-$950K; CA Coast-$1.5M; OR Coast-$700K; Northwest -$900K
MCH Enterprises, Inc.
(805) 237-0952
www.mchentinc.com




Radio Media Moves

New execs for GLR
GLR Networks (Grupo Latino de Radio) announced that Juan Pablo Alvarez has been named President and CEO for GLR in the US and Mexico. He has worked for parent company Grupo Prisa since 1990. He has hired Luis Gutierrez, formerly with Fox Sports en Español, as Director of Ad Sales. Also in the new management team are Jimmy Perez, now Director of Affiliate Sales after joining GLR in January, and Alejandro Nieto, who has been VP of Programming since February 2005.

Addition at CRB
Country music industry veteran Sharon Allen has joined the staff of Country Radio Broadcasters (CRB) Inc. as Director of Sales. In her new position, she will be responsible for both the sales and fulfillment of sponsorships for the Country Radio Seminar, Country DJ/Radio Hall of Fame Event and any other regional and Nashville based events the CRB undertakes in the future.


More News Headlines

Emmis board gets outside advice
Emmis Communications announced that the Special Committee of its Board of Directors has retained Davis Polk & Wardwell as its legal counsel, Barnes & Thornburg LLP as its Indiana legal counsel and Morgan Stanley & Co. Incorporated and Lazard Frères & Co. LLC as its financial advisors in connection with proposal by CEO Jeff Smulyan to take the company private. The buyout offer from ECC Acquisition, a company owned by Smulyan, would pay the public shareholders of Emmis 15.25 per share. The announcement yesterday said no timetable has been set to respond to the buyout proposal.


RBR Radar 2006
Radio News you won't read any where else. RBR--First, Accurate, and Independently Owned.

Cumulus stock still falling
Shares of Cumulus Media that weren't bought back in the company's Dutch auction tender are now worth even less, with the price continuing to fall after the buyback priced near the low end of its range. Bear Stearns-company's increased leverage is a concern. Wachovia Securities-has lowered her EPS estimates for the company.

RBR observation: Stay with RBR and we will keep our eyes and ears open for you. This year as well as next will server as a potential road map of many public radio companies.
06/19/06 RBR #119

NBC and Clear Channel
Radio get real together
Reality TV that includes radio as well has been launched on Clear Channel Radio with spots containing clues to draw viewers to yesterday's premiere of NBC's new "Treasure Hunters" series.

RBR observation: Big is sometimes better and Clear Channel has proven that its huge radio platform can be used effectively to hype a new TV show. Fox's "American Idol" wouldn't be what it is today without the heavy promotion employed during the first season on CC Radio. The radio element was one of three legs that launched Idol and made it a national icon: Coke had the idea, Fox bought it and Clear Channel promoted the hell out of it with their LA Morning host, Ryan Seacrest. Bottom line it is called cross marketing. You to can do it especially locally.
06/19/06 RBR #119

Cumulus Dutch auction
over-subscribed
It appears shareholders were only too happy to sell their stock back to Cumulus Media. The Dutch auction process announced last month was oversubscribed, so only about 74% of the shares tendered will actually be bought for the auction price of 11.50 per share. That was at the low end of the 11.00-12.50 range for the auction

RBR observation: radio stocks have continued to suffer on Wall Street, so lots and lots of shares were tendered well below that cap. As a result, the selling shareholders will get no premium at all, but rather are selling for six cents less than they could have gotten back on May 10th. What's next? We wait to see whether Lew is taking a play from Jeff Smulyan's book. Will he bid to buy out all of the remaining shareholders in a few months, take Cumulus Media private and merge it with Cumulus Media Partners?
06/16/06 RBR #118

Nielsen goes multiplatform;
Phasing out diaries
Come 2011, Nielsen Media Research plans to have electronic measurement in all US TV markets, eliminating diaries completely. The ratings revamp plan unveiled will also measure viewing of TV shows, regardless of the platform, including such things as iPods and Internet viewing. It is being called Anytime Anywhere Media Measurement, or A2/M2. In other words, Nielsen has now mapped out its plan to "follow the video."
06/15/06 TVBR #117


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