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Volume 23, Issue 123, Jim Carnegie, Editor & Publisher

Friday Morning June 23rd, 2006

Radio News ®

RBR First

CCU dumps companies in RFP process who've signed with Arbitron
Clear Channel, which is leading the Next-Generation Electronics Ratings Evaluation Team RFP process, is kicking everybody off the evaluation team that has signed with Arbitron, according to RBR sources. They don't want them to be part of the RFP process anymore - and since Clear Channel launched the whole thing, it is controlling who gets to participate. An email from Jess Hanson, CC Radio SVP Research was sent to CBS Radio (which recently signed for Arbitron PPM for a number of years), Emmis, Greater Media (all people that have signed on with PPM): "On behalf of the entire evaluation team, I'd like to thank you for your service. Your insights have been invaluable and important and have contributed to the good and successful work of the team so far. However, since you have decided to choose an electronic audience measurement vendor prior to the conclusion of the team's work, we do not feel it is appropriate to ask you to continue to serve on the team. Thanks again for your service, Jess Hanson."

RBR observation: We had wondered what was going to happen. We had heard that some of the groups who had already signed contracts for PPM still wanted to help evaluate the competing system from The Media Audit/Ispos. While it might have been good for the industry to try to keep everyone working together, we can understand Clear Channel's position as well. Should someone serve on a jury if they've already made a decision? We also hear, though, that CC Radio itself was in negotiations with Arbitron for its own PPM contract, but cut off talks when MRC accreditation didn't come as quickly as expected. This seems to be a game of chess where everyone is trying to figure out what works to their own advantage, rather than really trying to arrive at the best solution for the entire radio industry and its advertisers.

Univision auction crumbling; Azcarraga scrambling
A week ago it looked like Emilio Azcarraga Jean had the inside track to win the bidding for Univision. After all, his company, Televisa, and bidding partner The Cisneros Group (Venevision), already owned more than 20% of Univision and were its main program suppliers. But now Azcarraga Jean is scrambling to even make a bid, after losing three of his equity fund backers. First the Carlyle Group walked, concerned that Univision didn't justify the price that would have to be paid to win (6/22/06 RBR #122), delaying the Televisa-Venevision bid by at least a day. But yesterday two more backers checked out, also citing price concerns. And those two were the big bucks for the group - KKR and Blackstone Group. Televisa insisted yesterday that it will still come up with a bid, but without indicating any timing. Meanwhile, the Los Angeles Times, which has been close to the bidding process of LA-based Univision, reported that the lone bid from Haim Saban's group, reportedly 35.50 per share, had already been rejected as too low, although Univision denied that any bid had been accepted or rejected.

RBR observation: Has Bill Gates now become the key player in this drama? With the three equity firms out, the Microsoft king's personal investment company, Cascade Investment, is the only outside partner left in the Televisa-Venevision group. How badly does the world's richest man want to become a major player in US Hispanic media? If rumors are to be believed, Emilio Azcarraga Jean was pushing his partners to make a bid that would top the Saban group and win the prize. All but Gates balked at the price tag. Because of foreign ownership limits that apply to both Televisa and Venevision, unless new partners are found quickly, Gates would have to be the majority owner if this group is to acquire Univision.

What's next for Univision?
That's the question everyone is asking. Wachovia Securities analyst Marci Ryvicker thinks "no sale" is a real possibility. "Media publications report that initial bids are hovering around 35/share, which is significantly below Mr. Perenchio's 40/share asking price and represents a 3% premium to today's (6/21) closing price. We believe that Mr. Perenchio will walk away from a deal should the price not increase to the high-30 range," she said in a note to clients. Should Univision not be sold, it is not the end of the world for shareholders. Ryvicker says the most likely fallback scenario would be a Dutch auction tender offer, like those conducted in recent months by Emmis Communications and Cumulus Media. "We believe Univision could take on another approximately 1.5 billion of debt in order to repurchase approximately 17% of its shares outstanding," the analyst said. The other option, she noted, would be for Univision to split itself up and sell its assets to separate buyers. There would be problems with that, though, since FCC ownership limits would keep many major broadcasters from being able to acquire the Univision radio and TV groups, particularly on the TV side, valuations are weak in broadcasting right now and a piece-meal sale would be a long and difficult process.

Telecom: Amendment fest
spills into next week
When Chairman Ted Stevens (R-AK) gavelled yesterday's Senate Commerce Committee session to a close, not only was the Committee nowhere near to completing its work on S. 2686, the Communications, Consumers' Choice, and Broadband Deployment Act of 2006, neither had it ventured anywhere near any of the broadcast or cable elements of the bill. Chairman Ted Stevens opened the session by announcing the session would likely spill over into Friday morning and if necessary all the way to Tuesday 6/26/06 at 10AM. By the end of the session, Friday proved to be impossible, so Tuesday morning it is. Universal service and VoIP dominated the early going.

RBR observation: There's your bugle call, lobbyists! You now have an extra two full work days and a weekend to work with. Of course, most of the actual senators will no doubt be jetting out of town and have votes scheduled when they are here, so access might be a problem...

Clear Channel Orlando travesura costs 6K
The FCC has been called into an incident in the Orlando FL Hispanic radio wars. It's not bad enough that the contest Clear Channel Orlando Tropical outlet WRUM-FM claimed to be running was a travesura (that's Spanish for prank). The phone numbers it listed soliciting the lucky 100th caller belonged to rival Mega Communication's Spanish AC WNUE-FM. The prize was said to be 1K cash. The prank began at 7:40 AM and lasted "several hours," according to Mega, during which time the station was flooded with calls. Clear Channel tried to duck the fine, saying pranks were not covered under applicable regulations, that the bogus nature of the contest was revealed at the end of the show, and that station management had admonished the DJs and PD responsible for it. The FCC said nonsense. It wrote, "...Clear Channel failed to conduct the contest as announced and advertised." The base fine for that is 4K. The FCC added another 2K, because the station violated the public's trust in broadcasters in general and because its"...actions were intentional and maliciously harmed the listener goodwill of its competitor." The FCC had one last dig: "Finally, we note that Clear Channel has a history of violations of the Commission's rules, including this rule."

RBR observation: A fine of only 6K? Clear Channel got off pretty cheap. It's bad enough to prank your own listeners with a bogus contest. It's a form of theft to divert the workforce of a business, any business, from its daily tasks by forcing them to deal with juvenile pranks. It costs money to have people answer phones, and money can be lost when potential clients cannot break through the busy signal, to say nothing of the damage done to listener goodwill as noted by the FCC. All of this is difficult to price, but WNUE should be able to bill clear Channel for the services provided to WRUM and its "contest." Final note, RBR requests you read the next story below of real stations being honored.

Stations and networks honored for hurricane coverage
Hurricane Katrina figured prominently in the 2006 Edward R. Murrow Awards, honoring excellence in electronic journalism. Hurricane coverage was singled out for awards to several local stations in the Gulf area including WWL-TV and WWL-AM New Orleans (which are not co-owned) and WLOX-TV Biloxi, MS. ABC News Radio, CBS Radio News, National Public Radio and NBC Nightly News were also honored for their coverage of the storm and its aftermath as the award winners were announced by the Radio-Television News Directors Association. In all, 55 news organizations won 80 awards out of an initial pool of 3,723 entries from 568 news organizations.
| Here is the list |

RBR News Analysis

CBS movie move a natural
From the reaction in some of the mainstream press, you'd think that Les Moonves had proposed moving CBS Corporation into manufacturing airplanes or developing pharmaceuticals. What he said this week at a PricewaterhouseCoopers talk-fest in New York was that CBS might start making some movies. That is hardly a huge stretch for a media company. CBS already has two TV studios and it is not a big leap from making a made-for-TV movie to making a made-for-theaters movie. We note that Moonves was careful to say that he is not out to make the big-budget big-screen blockbusters that can make or break a company, depending on whether they measure up to their hype. Rather, he is talking about making six to eight movies a year in the 20-50 million range - and CBS would seek outside investors as partners. This is not quite free of any risk, as he indicated, but he's not betting the CBS ranch. Further limiting the risk is the potential to take those movies after their theatrical runs and put them on CBS' own outlets - first Showtime and then CBS or CW. It all makes sense to us.

Ad Business Report TM

Chrysler to offer new
employee discounts in July?
Chrysler Group will reportedly roll out a new program of discounted vehicle pricing 7/1. Automotive News reported Chrysler would become the first of the American automakers to offer employee-level pricing this season. According to AdAge, ads from BBDO Detroit and New York will feature Dieter Zetsche, global chairman of DaimlerChrysler management board. One dealer told AdAge Zetsche was in suburban Detroit last week shooting the commercials: "The plan is for Zetsche to tout the fuel efficiency of Chrysler, Jeep and Dodge models along with their German engineering. The company will also offer buyers a 30-day return-policy guarantee, the dealers said." Employee-level pricing saves consumers hundreds or even thousands on new car purchases since this pricing is typically below the standard dealer's invoice. Employee-level discounting proved popular with auto buyers when GM introduced it in June last year, forcing Chrysler and Ford to follow suit for the rest of the Summer. However, while it gets cars off the lots, it narrows profit margins considerably and after the incentives are over, sales often drop precipitously. The campaign will likely use both local and national radio & television, print and online. Chrysler Group spokesperson Eileen Wunderlich couldn't confirm the reports, but did say, "We have not made any announcements yet. There are some meetings today to finalize our plans and we will have something to announce next week. There are some reports out there based on speculation and we have shared some information with our dealers as we always do." Indeed, Chrysler Group Tom LaSorda, speaking to CNBC, said the automaker has not yet decided on employee discounts and is also considering other ideas.

Media Markets & Money TM

Cherry Creek floats stations over the Great Falls
The big group buy of Fisher's small market stations created a surplus for Joe Schwartz's Cherry Creek in the Great Falls market. A filing to put the surplus into the hands of Richard C. Parrish Associates LLC as trustee reveals the relatively simple plans Cherry Creek has. It will simply keep what it already has in the market, add one Fisher station and put the rest on the block with Parrish. It keeps KMON AM & FM, KLFM-FM, all licensed to Great Falls, and KVVR-FM Dutton MT. It'll make room for Fisher's KAAK-FM Great Falls. The other Fisher stations, KXGA-AM, KQDI AM & FM, and KINX-FM in Great Falls and KIKF-FM Cascade, all go to the trustee.

RBR observation: Under the old contour method, Cherry Creek would not be able to carry a fourth FM. According to BIA, as detailed in documents filed with the FCC, there are only four AMs and nine FMs home to Great Falls. However, there are an additional three noncommercial FMs which didn't count under the contour rules but do under the new Arbitron market-based rules, taking the market total from 13 to 16 stations. More importantly, it also takes the cluster ceiling from five stations with no more than three in one service to six stations with no more than four in one service. So we hope that when the local noncoms are selling totebags and Americana CDs that Cherry Creek will open its wallet in gratitude...

Washington Media Business Report TM

NCTA fighting a la carte
The National Cable and Telecommunications Association is putting out a print ad called "'A la carte' is French for 'expensive.'" It shows a distraught looking cartoon man reading a menu in a fancy restaurant with the caption, "Chaz was aghast at the price of a single chicken leg." The ad argues that picking 20 or so channels off a menu will still cost the same as it does under the current system, when as many as 150 channels are piped into your home. It notes that a number of well known channels fear for their continued viability under the system.

RBR observation: We don't always agree with our friends over on the cable side, but we do agree on this one. A la carte proponents point to the fact that most people view only 17-20 channels consistently. That may be true, but at many households, at any given time, often find something of interest elsewhere on the channel lineup, and many would not like to lose the ability to surf through a wide variety of channels before landing somewhere. And if you want to put a snarky edge on it, it's amazing how many times when even with 150 channels there doesn't seem to be anything on worth watching. If you're worried about edgy content, block it. If you're worried about price, your savings will be minimal and the paradigm may very well kill off your favorite channels. A la carte is a bad idea.

Ratings & Research

US Hispanics watch TV
differently than non-Hispanics
Over 26 million Hispanic adults are watching TV in an average week in the U.S. Virtually all Hispanics watch prime time TV (91% of Hispanic males and 93% of Hispanic females). Hispanic females are more likely than Hispanic males to watch morning and daytime hours. Daytime soaps account for twice as much of Hispanic females' time spent viewing when compared to non-Hispanic females' viewing (11% vs. 5%). According to the Total TV Audience Monitor (T-TAM)'s newly released report, Understanding The Hispanic TV Audience, Hispanic TV viewing habits are different from non-Hispanics'. Hispanic females watch the most TV: 32.4 hours per week on average (compared to 28.6 hours per week among non-Hispanic females). Hispanic males on the other hand watch 4.2 fewer hours of TV than non-Hispanic males (22.3 hours per week compared to 26.5 among non-Hispanic males). The study also affirms that broadcast television continues to dominate Hispanic viewing to a greater degree than non-Hispanics', given the lower penetration of cable services among Hispanics. Almost three-quarters (71%) of Hispanics' TV time is spent watching broadcast networks compared to 58% of non-Hispanic males', and 62% of non-Hispanic females' TV time. The T-TAM study conducted in the Fall of 2005 reports that Hispanic adults are less likely than non-Hispanics to have either the services or equipment to time-shift TV, or watch video on demand. However Hispanics are equally likely to have satellite service (25% vs. 24% of non-Hispanics) and to be paying for premium channels (32% vs. 31%). Hispanic and non-Hispanic females are equally likely to watch TV in out- of-home (OOH) unmeasured locations (20% and 19%, respectively). Hispanic females watch more TV OOH than Hispanic males - the opposite of their non- Hispanic counterparts. In an average week Hispanic men are 35% less likely to watch any TV in out-of-home (OOH) locations than non-Hispanic men (15% vs. 23%).

Transactions

215K WJCI-AM Champaign-Urbana (Rantoul IL) from Hooterville Broadcasting Inc. (Blanche M. Voss) to Ruben's Productions Inc. (Ruben Acevedo). 5K escrow, 80K to satisfy note held by City of Rantoul, balance in cash at closing. [File date 5/31/06.]

200K WHAP-AM Richmond VA (Hopewill VA) from Mainquad Communications Inc. (Daniel Berman) to Silver Dolphin Communications Inc. (Rachel Brady, Richard Brady, John Burgess). 10K escrow, balance in cash at closing. [File date 5/30/06.]

Stock Talk

A bad news day
Wall Street traders sold stocks as a Conference Board report indicated a decline in economic growth and oil prices moved higher. The Dow Industrials lost 60 points, or 0.5%, to 11,019.

Radio stocks were also lower. The Radio Index slipped 0.110, or 0.1%, to 147.504. The best performance was by Beasley, up 4.5%. The worst was Univision, down 3.1% on continued pessimism about its auction.

Radio Stocks

**Here's how stocks fared on Thursday**
Company	Symbol	Close		Change	Company	Symbol	Close		Change
Arbitron	ARB		36.99	-0.16	Hearst-Argyle	HTV		21.85	+0.02
Beasley	BBGI		6.70	+0.29	Journal Comm.	JRN		11.06	-0.20
CBS CI. B	CBS		25.95	-0.09	Lincoln Natl.	LNC		55.32	-0.35
CBS CI. A	CBSa		25.96	-0.04	Radio One, Cl. A	ROIA		7.24	+0.07
Citadel	CDL		8.82	+0.10	Radio One, Cl. D	ROIAK		7.22	+0.03
Clear Channel	CCU		30.27	+0.10	Regent	RGCI		3.58	+0.03
Cox Radio	CXR		13.75	+0.01	Saga Commun.	SGA		9.51	-0.01
Cumulus	CMLS		10.48	+0.01	Salem Comm.	SALM		12.64	-0.31
Disney	DIS		29.28	+0.15	Sirius Sat. Radio	SIRI		4.19	-0.02
Emmis	EMMS		15.96	-0.10	Spanish Bcg.	SBSA		5.10	-0.08
Entercom	ETM		24.94	-0.01	Univision	UVN		32.80	-1.04
Entravision	EVC		7.98	-0.13	Westwood One	WON		7.47	-0.11
Fisher	FSCI		42.00	-0.50	XM Sat. Radio	XMSR		13.50	-0.07
Gaylord	GET		42.10	+0.15	-	-	-	-	-

Bounceback

Send Us Your Opinions We want to
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Below the Fold

RBR News Analysis
CBS movie move a natural
Reaction to mainstream press is get a grip on yourself and keyboard...

Ad Business Report
Chrysler to offer discounts
New employee discounts in July and it means auto bucks...

Media Markets & Money
Cherry Creek floats stations
Over the Great Falls...

Ratings & Research
US Hispanics watch
TV differently than non-Hispanics...

Arbitrends

Stations for Sale

Chattanooga AM/FM
Jorgenson Broadcast Brokerage
(828) 859-6982
[email protected]

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

Promotion at
ABC News Radio
Heidi Oringer has been promoted to Executive Director of Entertainment Programming at ABC News Radio, adding the "Executive" designation to her previous title. In her new role, Oringer will focus on building new features and special entertainment programming initiatives, while continuing her duties as an occasional on-air entertainment reporter and analyst.

RBR Radar 2006

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

Univision auction stumbles
It looks like Jerry Perenchio won't get the 13 billion or more he had hoped for from the sale of Univision. The question now is whether he'll settle for less - or call off the auction.

RBR observation: Clearly Jerry Perenchio isn't going to get 40 bucks a share for Univision. How much less will he find acceptable? If the bidders don't move up to the 37-38 range, we would not be surprised to see Perenchio pull the company off the auction block. He's aging, but not elderly and feeble, nor is he ill, so liquidity for estate planning is not an urgent concern. Hispanic media is still growing rapidly in the US and Univision is getting the lion's share of that growth. If no one wants to pay him and other shareholders what Perenchio thinks Univision is worth, he can just hang on and watch the Hispanic media giant become even more valuable. Also Mark Wienkes of Goldman Sachs says Univision sale is still likely. For full close-up see
06/22/06 RBR #122

Entertainment and media biz
to grow 6.6% annually
Yep radio is part of the mix as the global entertainment and media (E&M) industry has entered a solid growth phase and will increase at a 6.6% compound annual growth rate (CAGR) to 1.8 trillion in 2010, according to PricewaterhouseCoopers' Global Entertainment and Media Outlook: 2006-2010. Full report on your outlook in
06/22/06 RBR #122

FitzSimons stands firm
Tribune CEO Dennis FitzSimons insisted at the Mid-Year Media Review conference in New York that a majority of the company's board of directors, including the independent directors, are firmly behind Tribune's plan to buy back up to 25% of its outstanding shares for around two billion bucks, despite opposition from the Chandler Trusts, Tribune's second-largest shareholder. He said the tender offer is on track, with closing set for June 26th. Complete details in
06/21/06 RBR #121

Multiplatform deal in Boston
New England Cable News (NECN) and WBIX-AM Boston have announced formation of a strategic media partnership. NECN programming is airing on the radio station 8-10 pm weekdays. "Adding NECN's award-winning news coverage to our lineup is a hug addition to WBIX's business-focused programming schedule," More and other key issues see
06/21/06 RBR #121

Univision bids
After being pushed back to give bidders more time to put together their offers bids for Univision were due 6/20/06. 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.

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. More in
06/20/06 RBR #120

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.
06/19/06 RBR #119

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