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Volume 22, Issue 124, Jim Carnegie, Editor & Publisher
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Friday Morning June 24th, 2005
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Radio News®
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 Tribune's Mullen has hopes for PPM,
but no love for LPM
You're not likely to hear Tribune Broadcasting President Pat Mullen say anything good about Nielsen's Local People Meters (LPM), but he told the Mid-Year Media Review in New York that there's a bit of good news - - by the end of this year the ratings impact of LPMs will have cycled through in New York, LA and Chicago, where Tribune's stations have suffered from what he claims is LPM's undercounting of young demos. "We have aggressively pursued Nielsen to put in actions that would help improve their ability to measure the younger audiences. They have put things in like coaching and incentives for young viewers, large homes. It simply has not worked yet - - and we don't have a great feeling of confidence that it will," Mullen said. The Tribune broadcast boss said that while Nielsen has dealt with charges of LPM undercounting minority viewing by oversampling in Hispanic and African-American homes, "but if you look deep into the sample, where they've achieved that success is by oversampling the 55+ homes - - they're still way undersampling the adult 18-34, particularly men 18-34 African-American and Hispanic homes." Mullen isn't hopeful that LPM, which requires participants to punch buttons to report their viewing, will ever do a good job of reporting what younger viewers are watching. Rather, he's hopeful to see TV ratings move to a passive device, such as the Portable People Meter (PPM) that Arbitron is currently testing in Houston. "We think, just fundamentally in this day and age, young people will not take the time to push buttons and work with an interactive system, but they agree to be passively measured," he said, noting that the early data from the PPM test shows higher levels of television viewing and "a much, much higher level of viewing by the younger demographics."
 Cumulus' WLTO-FM sued
over "100 Grand" contest
A woman who won a radio contest that promised the winner "100 grand" sued after Cumulus' WLTO-FM Lexington, KY gave her a candy bar (a Nestle's 100 Grand) instead of 100,000 dollars. Norreasha Gill filed a complaint claiming the station and Cumulus breached a contract to pay 100,000 to the contest winner. Night host DJ Slick sponsored the station's contest to "win 100 grand," Gill said in the lawsuit. Gill won by listening to the radio show for several hours and being the 10th caller at a specified time. She went to WLTO the next morning to pick up her prize, but was asked to return later. When she got home, she found that the station manager had left a message explaining she had won a 100 Grand candy bar, not money. Later, he offered her 5,000, Gill said. "I said I wanted 95,000 more," she said. "Nobody would watch and listen for two hours for a candy bar." Before her family went to sleep that night, Gill says, she promised her children - - they'd have a minivan, a shopping spree, a savings account and a home with a back yard. "What hurts me is they were going to get me in front of my children, all dressed up, and hand me a candy bar, after all those promises I made to them," she told the Lexington Herald-Leader. "You just don't do that to people." Cumulus/Lexington OM Robert Lindsay didn't return calls by deadline.
RBR observation: FCC rules on contesting are pretty strict, and precedents set will make it pretty hard for Cumulus to get out of this one.
Computer org wants broadcast flag burned
The Computer & Communications Industry Association is concerned that broadcast flag legislation may make its way into an appropriations bill going before the Senate Appropriations committee. It has fired off a letter to Committee chair Thad Cochran (R-MS) asking that any such effort be blocked. CCIA's President/CEO Ed Black notes first and foremost that the issue is both complex and controversial and warrants full legislative consideration, not just a back-door effort, which it says is what an appropriations rider would amount to. Black further notes that the courts recently shot down the FCC's attempt to install a broadcast flag into the regulatory framework. In background, he argues that the FCC's authority includes transmitting and receiving devices, but goes no further than that - - meaning that computers and recording devices are beyond the FCC's reach. Black says that extending the FCC's purview would require it not only to regulate existing devices, but to try to create rules for future devices, thus stifling innovation. That very innovation is expected by many to render any broadcast flag rulemaking in any event. "The regulatory bottleneck and attendant harm to innovation should be self-evident," wrote Black. "We therefore respectfully request that you reject any attempt to ratify the FCC's broadcast flag rule."
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 Public broadcasting battle rages on
The installation of Patricia S. Harrison as President/CEO of CPB should further fan the flames the ever-increasing dispute over public broadcasting. Meanwhile, Rep. Maurice Hinchey's (D-NY) Future of American Media Caucus, which was formed to educate members of Congress on the issues raised by media consolidation and the DTV transition, is now entering the fray over public broadcasting. Along with Diane Watson (D-CA), he intends to introduce a bill which would protect public broadcasting from political influence. CPB Kenneth Tomlinson has been widely accused of politicizing his agency, despite claims that his job is to protect it from just that. Since Harrison is a former co-chair of the Republican National Committee, her nomination will simply pour more gas onto the fire. The White House has responded by giving Tomlinson a vote of confidence. Then Republicans in Congress pushed though proposed cuts, taking CPB's 400M fiscal 2006 budget down to 300M. According to an article in the Los Angeles Times which sources CPB and the Association for Public Television Stations, other line item cuts would include 23.4M taken away from children's programming, including "Sesame Street," 39M earmarked for the DTV conversion, and 40M to upgrade the PBS satellite system. Hinchey noted that PBS was designed to be completely nonpartisan, then said, "It's a shame that it has even come to this, but the actions of Kenneth Tomlinson demand that this amendment be brought before the House. At the rate Tomlinson is going, it's only a matter of time before he changes PBS's name to FOX 2 and starts forcing Big Bird and Elmo to talk about the merits of the war in Iraq. We must have independent public broadcasting that reports the facts and holds both Democrats and Republicans accountable for their actions."
RBR observation: The focus of this publication is commercial broadcasting, and while we all have our own personal views, as a publication, we do not really have a dog in this fight. Except for this one particular: We have been told over and over again that the push to complete the DTV conversion is to hasten the availability of spectrum to America's first responders and to help fill empty coffers at the Treasury Department via spectrum auctions. If that's really true, why bring the DTV conversion to a screeching halt while public TV stations try to peddle enough totebags to build a brand new digital plant? (P.S. Many of you no doubt grew up with PBS daytime programming, and many of our children still rely on it for entertaining and educational programming. Nickelodeon has some excellent programming as well, but after that there is not much to choose from. Is Elmo really a necessary target for the budget machete?)
Ad nauseum: Political ads continue
A conservative political group is planning to put 18M dollars into advertising on behalf of potential Supreme Court nominees of President George W. Bush, and despite the fact that there are currently no vacancies on that particular bench, it is planning a 700K "down payment" on that campaign, according to the Associated Press. Progress for America is the group, and it is using the ads to put forth the notion that Democrats are going to attack anybody Bush may nominate. The ad will feature footage of DNC Chair Howard Dean and Senate Minority Leader Harry Reid (D-NV). Meanwhile, a Congressman is running ads to exploit the ethics woes of one on his fellow California delegation members. Duke Cunningham (R-CA) is under investigation for his real estate dealings with a lobbyist. Pete Stark's (D-CA) ad makes fun of that situation, and notes that if there was no wrongdoing, as Cunningham suggests, then lobbyists should consider themselves free to enter into similar arrangements with Democrats with no fear of running afoul of ethics rules. However, don't look for any of Stark's advertising budget to land at your station - - according to SFGate.com, his modest 500 dollar flight went strictly to online editions of Capitol Hill specialty publications, including CongressDaily and Hotline.
 McClinton signed for Marconis
Grammy Award-winning singer/songwriter Delbert McClinton will perform at the 17th annual NAB Marconi Radio Awards Dinner and Show September 22nd during the NAB Radio Show in Philadelphia. His appearance is being sponsored by BMI. Known for such hits as "Giving It Up for Your Love," and "B-Movie Box Car Blues," McClinton won his first Grammy in 1991 for a duet with Bonnie Raitt on the single "Good Man, Good Woman." He received his second Grammy in 2001 for Best Contemporary Blues Album with "Nothing Personal" and received a nomination a year later for the follow-up LP "Room to Breathe." McClinton has honed his unique fusion of rhythm and blues, blues and honky-tonk throughout his career playing with a long list of music legends. The Texas bluesman first achieved acclaim playing harmonica on Bruce Chanel's 1962 hit "Hey! Baby."
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Adbiz©
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 DRAG President Burton meets with
GM's LaNeve, OnStar, Little Caesar's
Detroit Radio Advertising Group (DRAG) President Bill Burton tells RBR/TVBR Tuesday was a dynamite day for radio. The day started with Little Caesar's Pizza, where Burton did a "Why Radio?" presentation to the top management team and regional managers from across the nation. They couldn't have been more receptive, keeping Burton for an hour longer than scheduled. From there, it was on to OnStar at the GM building where he met with Tony DeSalle, VP/OnStar and Jim Kobis, Manager of Communications. Tony pointed out that OnStar couldn't work on TV. It's when they removed the picture from the commercial and ran it on radio ("Theater of the Mind") that it became an overwhelming success. There is a lot more to come from OnStar on radio, Burton told us. "The coup de gras," says Burton, "Was my afternoon meeting with Mark LaNeve, GM North America VP/Sales, Service and Marketing. Joining our meeting Betsy Lazar, General Director of Media Operations at General Motors. It was an excellent meeting. Both Mark and Betsy were very receptive. One of the primary reasons I was there was to get greater emphasis on creativity for radio. For it to ever really happen, I told Mark the demand for greater creativity has to come from the top, because advertising agencies make their living with those 10 million dollar TV commercials, etc-radio is way down the list with many agencies. Mark knows that I'm not only a cheerleader for radio in Detroit, but I speak to his dealers all over the nation. And he's very appreciate of our efforts. Mark is very bullish on radio and stated there is going to be a lot more corporate money, in addition to OnStar, and that they were vigorously promoting radio with their dealers."
Marianne Fey to oversee Buick accounts at McCann
Mirroring General Motors' efforts to further connect brand and retail messaging in driving sales, McCann Erickson's Detroit office has promoted EVP/Group Account Director Marianne Fey to oversee both Buick national and retail advertising accounts at the agency. The announcement was made today by Garry Neel, McCann Detroit CEO. Fey has previously managed McCann/Jay, a wholly-owned subsidiary of McCann's Detroit office based in Rochester, N.Y., overseeing Buick's retail advertising groups, which were created to service GM's Local Area Marketing Program (LAM). Adding national brand advertising for Buick to her existing responsibilities is a natural fit for Fey, and a strategic move by McCann to best serve its Buick clients.
 Ad spend down at Sears
since merger
Sears, Roebuck and Co. has begun slashing its ad spending since merging with Kmart. Spend has fallen 20% since Kmart Chairman Edward Lampert announced plans to buy Sears 11/04, compared with the same period a year earlier, according to a recent report by Morgan Stanley & Co. "In April alone, ad spend declined by 69% compared to the same month in 2004," Gregory Melich and Armando Lopez said in a note to investors, citing TNS Media Intelligence numbers. In its 2004 annual report, Sears reported ad spending of 1.7 billion, representing about 4.6% of sales, Morgan Stanley said. By contrast, Kmart spends 1.6% of sales on advertising, while Target Corp. spends about 2.8% of sales, according to a Chicago Tribune story. MindShare handles Sears' ad spend.
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| Media Markets & MoneyTM |
Davidson combo deal has two-market potential
In point of fact, Davidson Media is buying only a Fayetteville NC FM station from Pro-Media Inc., but it comes with an LMA/option on a co-located AM which is sitting on a singleton application which if approved will upgrade it from a 1,000 watt daytimer in Fayetteville to a 50,000/750 watt blowtorch in Myrtle Beach. Broker Mitt Younts of EnVest Media, who represented seller James C. Clark, said that there do not appear to any roadblocks to getting the CP for WFMO-AM approved. The LMA/option on the AM is priced at 400K, and although the LMA starts right away, the sale is contingent on grant of the CP. WSTS-FM is being sold immediately, for 1.6M cash and a four-year non-compete/consulting agreement worth another 120K. That brings the full value of the deal if everything goes as planned to 2.12M.
Simmons lands in Little Rock
Actually, North Little Rock is a more accurate description of KDXE-AM - - that is the city of license. Arlene Horne's AM1380 LLC is selling the station to Simmons Media Group, which continues to show a willingness to acquire standalone AM stations in order to expand into new territory. It's getting this one for 350K. An LMA begins on 7/1/05, with rental fees of 10.5K per month - - 6.5K of which will be applied to the purchase price.
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| Washington Beat |
FEC looking at political ads on Internet
The denizens of Washington have thus far been resisting the imposition of new regulations and taxes on the Internet, but at at least one federal agency, that may be about to change. The Federal Elections Commission is considering an NPRM which would ad "paid Internet ads to the definition of public communications," in turn affecting "all other FEC rules that incorporate the term 'public communication.'" The rulemaking would also define and exempt "certain media activity on the Internet from the definitions of 'contribution' and expenditure.'" The FEC will be holding public hearings on the matter for two days next week beginning Tuesday: 6/28-29/05.
RBR observation: It is yet another sign that the Internet is arriving as yet another viable competitor bellied up to the table with a fork in the advertising pie. This rulemaking isn't so much about regulating the Internet as it is about keeping the election funding landscape level.
 File away another file violation fine
Trade Center Management's KHRA-AM was lacking a public file at its main studio when an FCC agent came calling back on 10/31/02, and the cost of that omission is 10K - - no, make that 8K after the FCC graciously took into account the licensee's overall record of compliance with FCC rules. KHRA's GM Ki-Yeoun Kim had argued that the records were there, but apparently they were not in a file. After a notice of apparent liability was issued, he said he talked to his communications counsel who explained the rule. "Based upon that advice," Kim declared, "I have created a public inspection file..." now available during business hours. The FCC took that as freely given self-incriminating testimony. The usual misunderstanding of the term "willful" was a feature of this one. Kim asserted that he in no way willfully broke the rule, and the FCC explained that it was indeed willful since Kim is supposed to be aware of all FCC regulations regarding station ownership.
RBR observation: At least the 2K discount shows that the FCC did not consider the violation malicious.
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| TVBR - TV News |
 TV One signs Time Warner
Just days after launching on a single Time Warner Cable system in Houston (6/21/05 TVBR #121), TV One has announced a long-term distribution with the MSO. TV One will be on in Charlotte, Dayton and Cincinnati by the end of this month, with launches on other Time Warner systems expected by the end of this year. "TV One's lifestyle and entertainment programming, which targets an underserved adult African American audience, is a welcome addition as we continue to increase the diversity of the networks on our channel lineups," said Time Warner Cable Senior VP of Programming, Lynne Costantini.
TVBR observation: This is a big breakthrough for TV One. Up until now, most of its cable carriage had been on systems owned by Comcast, which is one of the major owners of TV One, along with Radio One. While there have been some deals with individual cable systems, Wall Street analysts have repeatedly asked Radio One CEO Alfred Liggins when the network would sign major deals with the MSOs - - and he's always responded that talks were underway. Now, he'll have a big deal to talk about.
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| Transactions |
700K WKNZ-FM Laurel-Hattiesburg MS (Collins MS) from Radio Broadcasters LLC (Kenneth R. Rainey Sr.) to Educational Media Foundation (Richard Jenkins). 200K cash at closing, 500K note. Affiliation agreement with buyer's K-Love Network 4/1/05. [File date 5/13/05.]
90K WAJJ-FM McKenzie TN from Heartland Ministries Inc. (Darrell Gibson) to Madisonville Baptists Temple Inc. (Gary L. Hall, George T. Woodward, Steve F. Pleasant, Wayne A. Smith). 9K escrow, balance in cash at closing. Noncommercial station. [File date 5/13/05.]
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| Stock Talk |
Oil worries send stocks plunging
Oil prices moved above 60 bucks a barrel on Thursday, sending stock prices lower. The Dow Industrials dropped 167 points, or 1.6%, to 10,421.
Radio stocks went with the downward flow. The Radio Index fell 2.017, or 1%, to 202.597. Regent took the worst fall, dropping 5.1%. Saga fell 2.9%. Radio One was one of the few gainers, up 1.5% for its Class D stock and 1.4% for Class A after its TV One joint venture announced a deal to be carried on Time Warner Cable systems. Univision rose 2%.
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| Radio Stocks |
Here's how stocks fared on Thursday
| Company |
Symbol |
Close |
Change |
Company |
Symbol |
Close |
Change |
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Arbitron
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ARB
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42.88
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-0.19
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Jeff-Pilot
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JP
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50.44
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-0.08
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Beasley
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BBGI
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14.19
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-0.31
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Journal Comm.
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JRN
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16.81
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+0.02
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| Citadel |
CDL |
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12.02 |
+0.01 |
Radio One, Cl. A
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ROIA
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13.30
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+0.18
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Clear Channel
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CCU
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31.10
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-0.01
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Radio One, Cl. D
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ROIAK
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13.30
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+0.20
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Cox Radio
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CXR
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15.91
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-0.05
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Regent
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RGCI
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5.60
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-0.30
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Cumulus
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CMLS
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11.97
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-0.25
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Saga Commun.
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SGA
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13.92
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-0.42
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Disney
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DIS
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26.27
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-0.42
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Salem Comm.
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SALM
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20.05
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-0.04
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Emmis
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EMMS
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17.97
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-0.11
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Sirius Sat. Radio
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SIRI
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5.88
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-0.04
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| Entercom |
ETM
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32.85
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-0.21
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Spanish Bcg.
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SBSA
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9.63
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-0.02
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Entravision
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EVC
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7.71
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-0.04
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Univision
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UVN
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28.01
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+0.56
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Fisher
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FSCI
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47.45
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-1.31
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Viacom, Cl. A
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VIA
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32.90
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-0.57
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Gaylord
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GET
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44.45
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+0.30
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Viacom, Cl. B
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VIAb
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32.57
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-0.64
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Hearst-Argyle
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HTV
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24.93
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-0.09
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Westwood One
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WON
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19.97
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-0.22
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Interep
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IREP
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0.46
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unch
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XM Sat. Radio
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XMSR
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33.30
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-0.44
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International Bcg.
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IBCS
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0.01
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unch
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-
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-
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-
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-
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Bounceback
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 We want to
hear from you.
This is your column, so send your comments to [email protected]
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Stations for Sale
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Class A FM in Carolinas
Fulltime AM in Top 160 Market
Florida Panhandle 2 FMs, 1 AM
Louisiana AM-FM, Ranked Market
Gordon Rice Associates
(843) 884-3590 or Email
[email protected]
Upgradeable 1kw
Growing suburban
Albany, NY AM -- 199k
New solid state transmitter
New studio & automation
877-541-5250
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RBR Radar 2005
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Radio News you won't read any where else. RBR--First, Accurate, and Independently Owned.
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Gannett sees no improvement in Q2
Q1 2005 wasn't all that impressive, but Gannett Company executives warned investors more of the same is to come. But Gannett still likes the broadcasting business. Bloomberg quotes McCorkindale as saying that the company is looking to be a bidder for the Emmis TV group that's currently up for sale.
RBR observation: Glad to see their interest in TV grows as the medium is on shaky ground. But one thing we have to mention for those who may have forgotten or never knew that Gannett was a power house in radio. Now I bet they wished they never sold. TV owners need radio to cross market. Gannett there are a number of fine radio properties that can be had all it takes is money, a long term commitment with a solid business and programming plan. Radio needs a few Gannett's back into the radio business because the radio business needs new Fresh and Experienced media blood pumped into its veins. 06/23/05 RBR #123
Journal stalking acquisitions
No doubt about it, Journal Communications is still trying to make acquisitions as other public companies sit on the sidelines. Their target are mid-market properties in both radio and television. No secret a strong interest in Emmis TV stations since Journal already has radio stations in Wichita, Omaha and Tucson. Outlook on TV pacings Journal describes the forecast as "spotty" impacted clearly by the fact that they have three NBC affiliates...and their performance in primetime is causing us some issues on pricing. Journal taking the local serious and has been focusing on news, adding some more news inventory, to make up as much of that shortfall as we can as they go through this year.
RBR observation: In TV you can't change what the networks program but what affiliates fail to remember they do have a voice into decision making process. Problem is affiliates very rarely speak up until it is too late. 06/22/05 RBR #122
Self proclaimed King
of All Media gone
Howard Stern has split with E! Cable TV after 11 years with 2,000 episodes. E! retains the rights the Stern library. Talk in Hollywood has Stern in talks with Spike TV the cable channel branded as TV for men especially young male demo. Stern's website clock is ticking with 6 months left until he is gone from Infinity Broadcasting and on Sirius radio. 2006 will be an interesting year for satellite radio and cable TV with "The Howard". RBR observation: 2006 the year to see who can compete. 06/22/05 RBR #122
Wall Street analyst
ratchets down radio
Back down your 2005 radio revenue expectations again as Wachovia Securities analyst Marcia Ryvicker has reduced her growth expectations by one percentage point for most of the remaining months of this year. For the full year, that means that she is now expecting industry growth of 2.6%, rather than here previous estimate of 3.4%. She expects Q2 growth of 2%, rather than 3%, Q3 growth of 3%, rather than 4%, and Q4 growth of 3%, rather than 5%. "...one concern remains: Is the radio industry so far behind that during its race to catch up, it is likely only to run into disappointment after disappointment?" RBR observation: Whatever happened to 7% and 8% annual growth? That's supposed to be "normal" for radio, but it's been a while since we had a "normal" year. Ryvicker noted that only a few of the panelists at last week's Interep symposium expressed confidence that radio will return to those "normal" growth levels. Rather, she and other industry observers are looking for normal growth to be redefined at a lower level. We hope she's wrong, but given how this year has been going, we aren't going to claim that she's shooting too low with her forecast that 2005 growth won't even make it to 3%.
06/21/05 RBR #121
RBR observation: The six year Viacom/CBS marriage and divorce
Was it worth it? Back when the proposed merger of Viacom and CBS Inc. was announced in 1999, we were pretty much alone in saying that CBS Inc. shareholders were being short-changed in the deal. The deal was portrayed as a merger of equals, but the truth was that CBS shareholders were having to trade voting stock for non-voting Viacom Class B shares. In our view, they should have been paid a premium for giving up voting control to Sumner Redstone, but they weren't. Sumner Redstone is the controlling shareholder of both companies. Given the track record they've had with him so far, that doesn't appear to be anything to celebrate. 06/20/05 RBR #120
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General Manager
Small-market radio cluster in the beautiful Northwest. Dominant stations with a fantastic team with excellent benefits. If you have genuine passion apply.
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President/General Manager
Schurz Communications, Inc. is seeking President/General Manager candidates for one of its network affiliated television stations. Demonstrable success required in leading strong news & sales efforts. See TV Careers
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