Radio News ®

Infinity drops Arbitron
Other operators have threatened before to go without Arbitron ratings, but Infinity Broadcasting insists that this is the real thing - - it is not renewing its contract with Arbitron. The action means that Infinity's 185 radio stations mostly in top 50 markets, will no longer be allowed to use Arbitron ratings data for ad sales - - or anything else. Infinity President Joel Hollander insists that his people can sell their ad inventory without ratings and he won't pay the price hike that Arbitron has demanded and Arbitron President Steve Morris says his company will still post a revenue increase this year, even without Infinity's business. So, it's a standoff to watch. Who will blink first?

RBR observation: Winner - The Media Audit getting all of Infinity with a 5-year deal. Loser - Arbitron for around 10% of its revenue. Note: Infinity is not the first broadcaster to express frustrations with Arbitron's price increases and what's perceived as the arrogance of a monopoly vendor in refusing to negotiate on price. It will be interesting to see. | More... | RBR Observation |

Dereg still in limbo after 3rd Circuit rules: Overview
In a 218-page split decision, the 3rd Circuit US Court of appeals in Philadelphia finally weighed in on the FCC 6/2/03 ownership ruling. Thomas L. Ambro and Julio M. Fuentes comprised the majority, with Chief Judge Anthony J. Scirica providing the dissent. In general, basic FCC regulatory concepts were upheld, including its statutory right to regulate the broadcasting industry. The court also dispelled that there was any particular bias toward deregulation which outweighed the FCC's determination of what the public interest is. Scirica, in dissenting on the remanding of various caps to the FCC for justification or modification, said that the judge should not be second-guessing the carefully-considered determinations of an expert regulatory body. Oh, and if you're sitting on a deal waiting for any kind of new regulatory framework to take effect, keep sitting. The stay on the FCC ruling instituted last September will remain in place until the FCC has dealt with the many items remanded for reconsideration.

Demand to remand: Third Circuit on radio
The Third Circuit Court decision was a mixed bag for the FCC on radio, pretty much along the same lines it was for television. Some FCC concepts were upheld, but the numerical designations resulting from application of those concepts was questioned. First and foremost, the decision to abandon contour-based market definitions in favor of Arbitron-based definitions was upheld. So too was the decision to count noncommercial stations and to make JSAs attributable, and so was the decision to restrict the sale of grandfathered station clusters. On the other hand, the FCC's retention of current allowable station counts based on market size were remanded for justification or modification. The court held that the FCC's goal of five equal competitors, based on game theory, was arbitrary, and that there was no evidence that the rules as written would produce that result anyway. It also sent back the AM/FM subcaps for reconsideration.

Demand to remand: TV hits and misses
The Third Circuit Court has released its long-awaited decision on the FCC's 6/2/03 ownership rulemaking. While it upheld many of the concepts used by the Commission in arriving at its conclusions, it challenges almost all numerical assumptions on what actual limits should be. Much is remanded for better justification or modification. The biggest news for TV is the declaration that the changes from a 35% to a 45% national audience cap proposed by the FCC was declared moot due to the action of Congress late last year setting it at 39% in an appropriations rider. It also held that the act of Congress, in remaining mute on the 50% UHF station discount when calculating audience levels, tacitly approved it's continued use. It's a different story on local TV limits. It first upheld the restriction against any of the top-four stations being co-owned. It then went into the FCC's use of a six-player benchmark in setting TV cluster limits, resulting in its decision to allow three-station clusters in markets with 18 or more stations. The court sad use of a "rudimentary head-count of outlets" was too simplistic a metric for determining allowable combination, and remanded the numerical limits for modification or better justification.

Demand to remand:
Crossownership in the crosshairs
Like radio and TV, the Third Circuit ruling endorsed overall FCC concepts while attacking the numerical ownership provided for. The biggest news is its declaration that there is no reason to prohibit newspaper/broadcast cross-ownership. The opinion noted that oftentimes these combinations are of great value in promoting localism, particularly in the news department, and further, there was no evidence that they posed a threat to diversity. That said, the Court ruled that the numerical restrictions proposed for varying market sizes were based on flawed statistics. It particularly noted overweight consideration given to the Internet as source of local competition, and also said it was unproven and dubious to count newspapers, television stations and radio stations as equals. The allowable combo rules are remanded for justification or modification.

Demand to remand: Reaction
The 3rd Circuit decision was widely and rapidly hailed as a victory by broadcast consolidation foes. Here is the first wave of commentary from various players in the controversy.

RBR observation: Our quick take is that the court's decision is a win for nobody. If the FCC is able to justify its caps, then they go into effect as written. And there is no guarantee that a decision to modify will result in tighter caps - - there are two sides to the modification coin, meaning, we suppose, that the caps could actually loosen up. Stay tuned. More reaction - - and from what our inbox looks like already, we can safely say much more reaction - - on Monday. | More... |

Adbiz ©

Joe Uva: Shepherding $19 billion
in annual ad spend Part V
Joe Uva is President & CEO of Omnicom's OMD Worldwide, overseeing operations in 80 offices in 50+ countries. He's in charge of a whopping $19.3 billion global ad dollars spent yearly - - $8.3 billion here in the US. Clients include McDonald's, Visa, PepsiCo, Office Depot, Nissan, Hershey, Johnson & Johnson, Epson, ABC-TV, State Farm, and TAP Pharmaceuticals' Prevacid. Here, Joe gives RBR more of his take on the media biz. What would you suggest traditional radio do to keep it's audience from rushing to XM and Sirius and the Internet? They're looking for answers. That 18-34 age group is leaving TV, it's leaving radio. | More... |

AOL buys Advertising.com
Proving that the dot-coms aren't dead, Time Warner's America Online has announced a deal to buy Advertising.com for $435 million - - all cash. The acquisition of the online marketing firm will send AOL in a new direction, allowing it to deliver advertising across the Internet, not just to AOL subscribers. "Advertising.com will extend our advertising footprint on the Web, giving us unparalleled reach, and allow us to serve our advertisers better with more efficient campaigns. This is an exceedingly talented group of people, who, in a very short time, have created a very sophisticated and successful model for allocating and optimizing advertising online and selling it through a pay-for-performance model. Advertising.com brings a new dimension to our advertising offerings, enabling us to more fully participate in the growth in performance-based advertising," said Ted Leonsis, AOL Vice Chairman and President, AOL Core Service.

Media, Markets & Money tm

Washington Beat

GM Talkback

What have been your strategies for increasing revenue, reducing expenses, and attracting and maintaining quality personnel?
Deon Levingston, Radio One/Indianapolis
We are blessed to have a great staff in Indianapolis that has helped us outpace the market over the last three years. Since Radio One purchased our stations in 2001, we have grown revenue by over 30 percent. Here are some of the things that we have done in Indianapolis that I believe have been successful. You have to work harder, work smarter, and ask more people for dollars. This may sound basic, but often times the quickest way to positively affect your revenue is to return to the basics. | More... |

Ratings & Research

Transactions

$6.25M KXRR-FM, KZRZ-FM, KMYY-FM & KQLQ-FM Monroe LA (Monroe, West Monroe, Rayville & Columbia LA) from Monroe Radio Members LLC to Opus Broadcsating Monroe LLC.

$1M WBMF-FM Chicago (Crete IL); WWGN-FM Ottawa IL; and WAWF-FM Kankakee IIL from American Family Association to Family Worship Center Church Inc.

$234K KFIF-FM Soda Springs ID from Douglas R. Mathis to Tri-State Media Corp.

$150K KTUE-AM Tulia TX from Dove Media LLP (Bruce Campbell) to Paulino Bernal.

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