Welcome to RBR's Daily Epaper
Volume 25, Issue 13, Jim Carnegie, Editor & Publisher
Monday Morning January 21st, 2008

Radio News ®

December silver lining:
Easy 2008 comps

What else can you say about a quarter in which business continued to be recorded in red ink? The combination of a -4% performance in local and -12% showing from national produced a traditional business loss measured at -6% by the Radio Advertising Bureau and Miller Kaplan Arase & Co. Non-spot business provided a positive 12% to counterbalance national's negative 12%, but it was only enough to shave one percentage point off the overall loss, bringing the month of December home at -5% compared to December 2006. CL King & Associates analyst Jim Boyle says the December expectation on Wall Street was a 2% drop, so news of the 5% deficit may be an indicator of a coming recession. He said Q4 will likely come in at -4. Boyle says "it's time to monetize the P-1s, time for dual-revenue streams." That means enticing loyal fans to interact with the station on its website, utilizing the tech savvy and cultural intimacy of its youngest employees to lead the way.

To Victor Miller at Bear Stearns, on the other hand, the December drop was within the expectation zone, and he further refined his guess as to overall Q4 performance to a -4.3% drop, with a 1% non-tradition bonus on top of a -5.3% combined local/national result. For 2007 as a whole, those numbers are expected to be -3% for traditional, leavened to -2% when non-traditional is factored in. Miller also provided Q4 projections for key public companies. None seem likely to escape red ink when recording comps. The projections include Entercom (-1%); Cox (-2.5%); Clear Channel (-3%); Cumulus (-3.5%); Salem (-3.7%); Radio One (-5%); Citadel (-5.5%, stations only); Beasley (-6%, same station); and CBS (-7%).

RBR observation: The good news: 2007 is over. The bad news: 2008 looks like more of the same despite the expected shot in the arm from political. Miller thinks the business projects flat, and while nobody is likely to be thrilled about duplicating a bad set of results, it does beat drilling down further.

Challenges ahead for radio
Corporate bonds don't behave quite the same as stocks and don't get nearly as much day-to-day attention from most investors. We do, though, find it interesting to read what veteran broadcast analyst Bishop Cheen and his associates at Wachovia Capital Markets have to say about the media industries that they track for bond investors. While Cheen sees HDTV as the "killer app" for television, he sees only a "potential modest lift" from HD Radio as new digital radio channels are slowly rolled out. "We do not believe the upside of HD Radio will be of the same magnitude of HDTV, but it may help stabilize a currently weakened medium," the Wachovia analysts said in their 2008 Outlook. Meanwhile, there are real challenges for broadcasters. "The auto industry, which contributes roughly 16% of radio and 25% of TV revenues, has been struggling to find stability along with a fragile retail economy. Rising gas prices will likely curtail time spent listening. Audience measurement via a shift to a currently glitchy people meter is also problematic, especially for radio," wrote Cheen and Davis Hebert, who handle high yield bond research for radio, TV and outdoor at Wachovia. The bottom line for investors is that they are underweighting radio bonds and overweighting TV "in line with our earnings expectations, in addition to where we think capital may flow once the credit crunch abates."

Analysts still on the XM/Sirius case
Last week at Motley Fool, an analyst called XM and Sirius stock a bad investment, whether or not the proposed merger ever gets to green light from regulators at the DoJ and FCC. A different Fool has since weighed in wondering why the merger hasn't been approved yet, and yet another observer from CNNMoney.com is standing by a prediction that the deal will be done. After Motley Fool's Philip Durell panned the stock, Rick Aristotle Munarriz has penned a piece calling for the wedding to go forward. He thinks FCC Chairman Kevin Martin is inclined to give thumbs up on the basis of his love for a la carte channel offerings, but that DoJ approval has been tougher to come by. Paul R. LaMonica at CNNMoney.com expressed a similar view, and said that he still thinks it'll go through, even though a month and a half have passed since analysts were tripping over one another to announce that approval was "imminent" last November. Munarriz made an interesting comment, saying that "...it's naive to believe that XM and Sirius would return to their adversarial roles if the merger were somehow axed. They've dug too deep into each other's books. They've spent too much time mapping out synergies and sidestepping the closet skeletons."

RBR observation: Huh? Munnariz seems to be prescribing thinly-veiled collusion between the two companies should the merger be derailed, underscoring why two companies do not add up to free open-market competition, much less one. In calling for this collusion, Munarriz makes precisely the point that some antitrust experts have made in opposition to the merger. If a la carte is such a great deal for satellite radio subscribers, why isn't one of the two "competitors" offering it right now? What an edge that would be, what a selling point! The answer is that a la carte isn't good for subscribers (or producers, or artists). At this point, we would suspect that the percentage of DARS subs getting the service for the benefit of their children is minimal; the biggest effect of a la carte is to kill value per channel; and the a la carte program they are offering is restrictive anyway.

No, a la carte isn't for subscribers, it is there strictly to appeal to the national nanny proclivities of Kevin Martin, just as Munarriz noted. The fact that neither is offering it independently is an example of collusive behavior, and is yet another reason to expect the merged entity to use its newfound market power with its own welfare in mind, not that of its captive, option-free subscribers. This merger should follow DirecTV-DISH into the reject pile.

Taking some outdoor profits
Clear Channel Outdoor, which is 89% owned by Clear Channel Communications, is selling its 50% stake in South Africa's largest outdoor advertising company to its partner, Independent News and Media (INM). Bear Stearns analyst Chris Ensley notes that CCO will receive about 127 million bucks worth of INM stock in the deal, which is well above the 46 million value that CCO carries on its balance sheet for the 50% stake - "so CCO is monetizing its stake at 175% over its carrying value." What Ensley wonders now, is this an indication of things to come? He says CCO also has minority stakes in numerous outdoor companies around the world. Excluding the South African stake being sold, the analyst says the remaining stakes are carried on the CCO balance sheet at a total of 51 million. How much more are they worth if monetized?

DCCC kicks off
Red to Blue campaign

The headline result of the 2006 midterm elections was the ability of the Democratic Party to capture majorities of both houses of Congress in Washington. Now, the Democratic Congressional Campaign Committee (DCCC) is looking to build, according to Congressional Quarterly. To do that, it is going to be providing cash to 10 candidates not currently enjoying employment in Washington. Seven are in districts which supported President George W. Bush over challenger John Kerry, and which at resident to currently have Republican representatives. The catch is that all seven incumbents have announced their retirement, opening an opportunity to make inroads into Republican, or red, territory. The other three opportunities include Illinois 14, where a 3/8/08 special election will fill the seat of former Speaker Dennis Hastert (R-IL), out on the early retirement program; LA 6, where Richard H. Baker (R-LA) is expected to resign; and IN 7, the lone district on the list already in Democratic hands, where the grandson of the late Julia Carson is running to fill her seat. The other candidates include John Adler (NJ 3), John Boccieri (OH 16), Charlie Brown (CA 4), Debbie Halvorson (IL 11), Mary Jo Kilroy (OH 15), Linda Stender (NJ 7) and Gary Trauner (WY at large).

RBR observation: This puts 10 districts into the battleground category, and if they're attracting Democratic cash, they will most likely pull even more from the Republican side. In the sale of advertising time for the political category, location is everything. The DCCC just elevated all of these districts.

Wall Street Business Report TM
Another firm goes broadcast bare
Yet another big Wall Street firm has decided it can do without an analyst focusing on pure-play radio and TV companies. James Dix is gone from Deutsche Bank, where he had been the primary broadcast analyst since 2005 (6/6/05 RBR #110), when he took over the seat occupied for so long by Drew Marcus, who moved to the investment banking side at DB. Dix had covered Entravision, Radio One, ACME, Beasley, Clear Channel, Entercom, Hearst-Argyle, LIN, Salem, Sirius and XM.

RBR observation: The pool of broadcast analysts just keeps getting smaller. With both radio and TV stocks so beaten up, many knocked down into penny stock territory, it is easy to see why fewer and fewer brokerage firms see any reason to spend money on covering the sector. Hopefully, that will improve at some point. For now, we expect other media analysts at DB to pick up a few of the pure-play radio and TV stocks.

RBR News Analysis
Nevada - what Nevada??!
You may note that Republican Ron Paul came in second place in Nevada Saturday. You would never know it, however, by listening to/watching the coverage. CBS Radio News would not mention it, for one at the top of the hour. They, like their Television brethren, focused on South Carolina and briefly the Democratic rankers in NV.

MSNBC had a three hour block entitled, "NV Caucus Report" on Comcast listings. During that three hours they only covered SC....it was kind of obvious the pundits and anchors weren't prepared for this much coverage from that state--including Tim Russert and Brian Williams. No live coverage or reporters in Nevada, nothing reported from Nevada. The bank of reporters must have finally hit the slots. They ended up talking about everything from what brand of toilet paper McCain prefers to the car Huckabee drove in college, with South Carolina plastered all over the screen. It seemed an obvious change in planned programming. They would occasionally show the democratic win list and percentages in NV, but didn't seem to follow up with the Republican list. They would briefly mention Hillary's win in NV.

We watched FOX News, MSNBC and CNN an hour and a half straight skipping around and they just wouldn't mention Nevada....all SC. Finally, MSNBC mentioned Romney won Nevada's Republican race and we finally saw a list that included Ron Paul--full screen. But that was it. We never saw Nevada mentioned on CNN or Fox News in the time we were watching. If they did, it must have been minimal. It should be interesting to see what Nevadans think about their state getting absolutely minimum coverage. At least they ran the rankers for the state on the news scroll at the bottom for MSNBC. Perhaps the Ron Paul campaign has a point on media bias. We sure saw it on Saturday night.

Ad Business Report TM

Zenith Media announces reorg
Zenith Media USA, a unit of Publicis Groupe SA, announced a major restructuring of its buying operations on Friday. The reorganization reflects the development from traditional broadcast and cable operations to the "video" marketplace where Zenith has been increasingly successful in driving integrated media programs and content across multiple platforms and venues. Under this new structure, Peggy Green, currently President of Broadcast, becomes Vice Chairman, Zenith Media USA, charged with providing strategic oversight to Zenith's video investments and marketplace approach, reporting to Tim Jones, CEO ZenithOptimedia NA. Green will also lead the agency's relationships with the media vendor community at the highest levels within America's top media companies, developing new initiatives and approaches.

Also, Ava Jordhamo is promoted to EVP Director, National Broadcast, reporting to Wendy Marquardt, President, Zenith Media USA. Green will work directly with Jordhamo and Marquardt to apply marketplace strategies to the agency's clients. National broadcast operations under Jordhamo are structured in line with the Agency's account groups: "ZenithSpheres", which integrate planning and execution operations in client-facing teams. The national broadcast teams within each ZenithSphere are headed by SVP Group Directors: Sophie Aloisio, Sarah Brasfield, Lynn Garone, Cindy Gurmann and Larry Hunt. Matt Feinberg leads national radio, and reports to Jordhamo.

Said Jones: "In 2006, we began the transition from traditional media agency departments to a matrix structure enabling more integrated work via client-facing teams. This latest broadcast reorganization acknowledges the video marketplace as it is today. Our clients support this approach as we have seen exponential growth in executing integrated programs."

Media Business Report TM
Big shareholder hopes to influence Media General
Various investment funds managed by Raymond Harbert and his associates have raised their total ownership of Media General to 18.4% and indicated in an SEC filing that they may seek seats on the company board. The investor group says it may also contact other "significant shareholders" regarding alternatives to enhance shareholder value. Media General's stock price plunged nearly 43% last year. The Harbinger Capital Partners funds, Harbert Management Corporation, portfolio manager Philip Falcone and others associated with Harbert have been aggressively buying Media General shares, nearly doubling their collective holdings in just a few weeks. They aren't spelling out just what they want to change at Media General to unlock shareholder value, but they say they've been investing in the company because they think it represents "an attractive investment."

RBR observation: In his last conference call, CEO Marshall Morton was asked whether Media General was considering a move to split its newspaper and TV businesses into separate companies as Belo is doing. Morton dismissed the idea, saying that he sees value in keeping the operations together (10/19/07 TVBR #205). Our guess is that Harbert and Falcone may not share that view.

Newspaper chains sell newsprint company
SP Newsprint Company announced a deal to be bought by White Birch Paper Company for 350 million in cash. That cash will be going in equal shares to three newspaper companies who currently own SP - Media General, The McClatchy Company and the newspaper division of Cox Enterprises. Media General announced that it expects after-tax proceeds from its share to be 37-40 million, which it will use for debt reduction.

Media Markets & Money TM
Splitsville in Greenville-Spartanburg
WMUU Inc. could have been called WMUU Squared, but no longer. Principal John D. Matthews is keeping WMUU-FM, but WMUU-AM is under contract for sale to a religious Hispanic outfit known as Comunidad Christiana Internacional - Asambleas de Dias Inc., headed by Edson Dos Santos. The price for the Greenville-licensed AM is 550K. 30K went into escrow, 20K will come in cash at closing, 380K will come pursuant to an agreement between the buyer and Pinnacle Bank, and the final 120K will be paid off pursuant to a promissory note. The buyer must come up with new calls for the station.

Close encounter in Fayetteville
A lot of states have a Fayetteville. This one is in Arkansas, where, according to Media Services Group broker Bill Lytle, Community Broadcasting Inc. has accepted the keys to KOFC-AM/KAYH-FM from seller Family Vision Ministries/William B. & Martha J. Disney. The price reported to the FCC was 900K. Members of the Bott family, with long radio roots, are listed among the buyers.

Washington Business Report TM
Another pirate walks the plank
Nicolas Paula is a member of the spectrum buccaneer community, New York market division. His unlicensed station was caught operating on 94.5 MHz in the Bronx, and has been hit with a 17K fine by the FCC. The Commission did not go into much detail in announcing the circumstances behind bringing this privateer to justice, but the usual fine for a first offender is 10K, so we suspect that the offense was about 70% more egregious than usual. Paula did not protest the fine.

Entertainment Business Report TM
Stepping down as VP/GM of K-Rock
Tom Chiusano, will be stepping down Vice President and General Manager of CBS Radio's K-Rock at the end of January. He will continue to work for the station as a consult. This month marks 23 years that Chiusano has led the day to day operations of the station helping to transform it from an underperforming CHR station into one of the most influential rock stations across the country. His career with Infinity Broadcasting began in 1982 as GM of WIVY in Jacksonville, FL.

Maria Marin launches in NY;
adds another Hispanic affiliate

ABC Radio Networks En Espanol announced that Tu Vida Es Mi Vida (My Life is Your Life), hosted by motivational speaker and writer Maria Marin, will add Spanish Broadcasting Systems' WPAT-FM New York to its list of affiliates. The show launched in New York yesterday and airs Sundays from 9-11 p.m. ET. The show got its start in January '07 at KSSE-FM Los Angeles and was signed to national syndication by ABC Radio Networks En Espanol two months later.

Carton Brooklyn Bridge walk
On Friday Craig Carton, co-host of WFAN's morning show, carried out his end of a bargain made with radio partner, Boomer Esiason. Carton, who believed the Giants would lose to the Dallas Cowboys in their NFC Divisional Playoff game, offered to humiliate himself in front of listeners and passerby if the famed New York team won, which they did. Carton walked across the Brooklyn Bridge into Manhattan wearing nothing but a Giants jersey and a Speedo.

Internet Business Report TM
US online ad market to boom
Yankee Group announced the US online ad market will reach 50.3 billion in revenue by 2011, more than doubling 2007's revenue. The internet accounts for approximately 20% of overall media consumption in the US, but advertisers currently invest only 7.5% of their budget online. By 2011, nearly 25% of all media consumption will be online, drawing 15% of the ad dollars.

IdeaCast expands with Transit TV
IdeaCast, a private provider of custom television content and advertising to health clubs announced that it has entered into a strategic sales relationship with Transit TV and will represent the Transit TV advertising inventory to IdeaCast's list of ad clients. In addition, IdeaCast has also entered into a letter of intent with an option to acquire Transit TV in Q2. Transit TV is a major transit-based digital out-of-home adverting network operator with systems installed and operational in Los Angeles, Chicago, Atlanta, Milwaukee, and Orlando, Transit TV communicates with over 500 million riders per year on nearly 4,000 vehicles. IdeaCast's plans for Transit TV include expanding the Transit TV network to the top 10 U.S. markets, as well as contracting with Nielsen Media Research to establish metrics and a process for audience measurement for the transit network.

Ratings & Research
Talkers take to the tunnel
That's tunnel as in tunnel vision. As a general rule, talk hosts bounce off whatever is in the news during a given week and amplify it. This week was no exception, but that's amazing when you consider that the Project for Excellence in Journalism news coverage chart for the week of 1/6/08-1/11/08 detailed a 49% focus on the 2008 election. Talkers followed their general rule and amplified the news, allocating an astounding 75% of their available time and space to the election. During a normal week, 3% might get a story on the bottom of the top ten list; this week, it was all that was needed to tie for second (the topics were Iran and immigration). Three stories making the list couldn't even be rounded up to 1%. As with straight journalists, talkers allowed the Mideast travels of President George W. Bush to exist in somewhat of a media vacuum -- it was one of the sub-1% stories.

Monday Morning Makers & Shakers

Transactions: 12/3/07-12/7/07
As detailed in this space, we can say that station trading will sputter to a close during the final days of 2007. In the first week of the last month, a mere five deals involving a mere seven stations hit the FCC's database. For the second week in a row, none of them were television stations. The top deal, noted below, accounted for about two-thirds of total value.



Total Deals







| Complete Charts |
Radio Transactions of the Week
One good niche operator deserves another
| More...
TV Transactions of the Week
Still snoozing.

4M WDDD-FM, WFRX-AM/WQUL-FM, WTAO-FM & WVZA-FM Marion-Carbondale IL (Johnston City, West Frankfort, Murphysboro, Herrin IL) from CC Licenses LLC, a subsidiary of Clear Channel Broadcasting Inc. (Mark Mays) to Withers Broadcasting of Southern Illinois LLC (R. Russell Withers Jr.). 400K escrow, balance in cash at closing. Existing superduopoly. Sale does not include WDDD-AM Johnston City IL/WVON-EB Berwyn IL. If Withers obtains FCC waiver to break up this regular band/expanded band pair, it may acquire WDDD at no extra charge; if not, it will strike an SSA/JSA with it; its license must be returned to the FCC 8/2/11 regardless. [File date 12/21/07.]

650K WMEL-AM Melbourne-Titusville-Cocoa (Melbourne FL) from David Ryder, Receiver to Divine Mercy Communications Inc. (Norman E. Benz, Robert G. Groppe, Michael E. McWilliams, Elaine McGavren). 100K escrow, balance in cash at closing. [File date 12/21/07.]

Stock Talk
Stocks dropped again on Friday
President Bush's proposed economic stimulus package wasn't enough to calm recession fears on Wall Street. The Dow Industrials fell 60 points, or 0.5%, to spend the weekend at 12,099.

Nearly all radio stocks were lower. The RBR Radio Index declined 4.116, or 5%, to an all-time low of 78.210. Beasley plunged 19.3%. Radio One was down 10.9%, Citadel 7.3% and Cumulus 7.1%.

Radio Stocks

Here's how stocks fared on Friday

Company Symbol Close Change Company Symbol Close Change




















Journal Comm.







Lincoln Natl.




Citadel* CDL
1.52 -0.12

Radio One, Cl. A




Clear Channel*




Radio One, Cl. D*




Cox Radio*












Saga Commun.*




Debut Bcg.




Salem Comm.*








Sirius Sat. Radio








Spanish Bcg.*








Westwood One*








XM Sat. Radio













*Component of the RBR Radio Index


Send Us Your OpinionsWe want to
hear from you.

This is your column, so send your comments and
a photo to [email protected]

Feedback on Jim Boyle's ideas: Building new radio revenues
(1/18/08 RBR #12)

Jim Boyle is one smart guy. The ideas are certainly viable. However, if radio was doing its job right, we would not have to resort to such tactics. The real hidden revenue comes from reducing advertiser churn by taking total responsibility for the results of every campaign we run. If we produce better results for clients, and we increase our client retention rate, we won't have to raise rates unconscionably, which just sends advertisers running to other media.

Barry Cohen
Managing Member
AdLab Media
Clifton, NJ

Below the Fold
Ad Business Report
Zenith Media reorg
Major restructuring of its buying operations - Who's going Where...

RBR Analysis
Nevada - what Nevada??!
By listening to/watching the coverage. You would not know who is what...

Washington Business Report
Pirate walks the plank
Unlicensed station was caught operating on 94.5 MHz...

Media Markets & Money
In Greenville-Spartanburg WMUU Inc. could have been called WMUU Squared, but...

Stations for Sale

Market your Stations For Sale
in our daily epapers.

Jim Carnegie
[email protected]

Radio Media Moves

PD named at

Greater Media Philadelphia announced Don Gosselin has been named the new PD at Adult Hits WBEN-FM. Gosselin brings over 12 years of programming experience, most recently achieving the highest ratings in over five years at adult contemporary WNIC-FM Detroit. Prior to that, he was involved with Hurricane Katrina recovery as OM for the CC Radio cluster in New Orleans.

More News Headlines

Bob Carey, President of SSI, EMailed RBR late Sunday to share some very tragic news surrounding SSI's Rick & Bubba Show. Rick and Sherri Burgess lost their three year old son Bronner last evening in an accidental drowning in the family pool. Rick was away in Tennessee speaking at a teen retreat/seminar when he received the news and immediately returned home. Bronner is the youngest of Rick's five children.

To ensure our 48 network affiliates continue to receive programming during Rick's absence, Bill Bussey "Bubba" will be hosting the show solo today with assistance from show producers Calvin "Speedy" Wilburn and Demarco "Don Juan" Williams. Tuesday, current plans call for a best-of show so that everyone associated with the program can attend funeral services for Bronner with the Burgess Family. If you'd like to reach Rick and offer condolences, feel free to EMail him here and please do keep the Burgess family in your thoughts and prayers as they deal with this truly tragic loss.

Thank you.
Bob Carey

A false alarm
Do you think there were a few spit takes over the morning coffee among members of a certain Smith family located in the Baltimore area, or among those who have one of the Smith's signatures on the bottom of their regular paycheck? The headline, from the Associated Press, read "Sinclair pays 2.45M for air violations." Sinclair is not at all known for indecent broadcasting (above and beyond that which is fed to it from the national networks, at any rate), but it has been known to play close to the edge in the opinions of some when it comes to politics. But it's done nothing that would warrant this kind of hit from the FCC. The answer is that it didn't do anything. The Sinclair in question is Sinclair Oil Corporation, which was fined for fouling the air with emissions from three facilities located in Wyoming and Oklahoma, and it was the EPA, not the FCC, levying the fine. It was not a broadcast matter at all.

RBR observation: If members of the Sinclair Broadcast Group organization missed this headline and are seeing it the first time, you may now take a retroactive sigh of relief.

TVBR - TV News

Right time for white?
That's as in white space, the spectrum in the television zone between licensed broadcast channels, which is being targeted big time by high-tech companies that would like to flood it with unlicensed devices to deliver wireless broadband and other services. Earlier tests have failed, and NAB remains skeptical about this latest round. This latest round of FCC tests will include laboratory test which "...measure the performance capabilities of the prototype devices under controlled conditions," and field test "...conducted at a variety of locations to provide information on the performance of the devices under real world conditions." Testing will begin 1/24/08 and will take four to six weeks. Once the testing is completed, a report will be issued within another four to six weeks, placing its release in April or May if everything stays on track. NAB EVP Dennis Wharton commented, "NAB's paramount objective remains the delivery of interference-free digital broadcast television to more than 100 million American households. We are not opposed to new technology; however, given the failing grade performance and incomplete implementation of the devices submitted in the first round of tests, we have a high degree of skepticism whether tests of these devices will demonstrate that a practical service using portable devices can be introduced without jeopardizing DTV service."

TVBR observation: Testing is one thing. But actually undertaking a radical spectrum experiment like this in the face of the biggest and most challenging spectrum shift in US history -- the DTV transition -- is just crazy. Once television stations are broadcasting in digital, interference won't amount to the infringement of a little static or snow on picture reception; it will essentially wipe out useful reception. The move also puts at risk devices used for remote newsgathering and broadcast of sporting events. NAB notes that 70 members of Congress have expressed their own skepticism at the timing of the white space land grab. Any meaningful action on this front should be put off until the DTV transition has been completed.

RBR Radar 2008
Radio News you won't read any where else. RBR--First, Accurate, and Independently Owned.

Station trading in the
3rd Quarter of 2007
Few industry movers and shakers are as handcuffed to the regulatory environment in the same way that M&A players in the broadcast field are. Radio deregulation that was included in Telecom 1996 spawned an Oklahoma Land Rush for radio stations in the top markets. At the same time, the lack of any meaningful dereg for television trading put it into the doldrums.As a result, top-market radio trading remains becalmed. Meanwhile, a couple of years ago, traders sitting on TV properties gave up waiting for the FCC finally started making deals again, and it was a good thing, as the FCC declined once and for all to offer any dereg to the industry last December. So after years of radio dominance in station trading, television is taking over. And the big money is coming not so much from stations changing hands, but from station groups retreating from Wall Street and going private.

RBR note: Complete analysis with stats and charts at RBR.com Intelligence Brief section.

Will the Cumulus buyout get done?
We've heard much discussion of that question and Bear Stearns analyst Victor Miller notes that the current stock price indicates "strong doubts" on Wall Street about a closing. But whether or not the going private transaction gets done at the 11.75 per share price announced last July, Miller says it is likely that Cumulus will be taken private in 2008. The analyst says the implied takeout price of the 1.3 billion bucks buyout is 11 times anticipated 2008 EBITDA, which was "not aggressive" relative to other 2005-2007 deals

RBR note: Complete analysis in this issue of RBR
01/18/08 RBR #12

Will private equity go
under the microscope?

On the whole, it was a typical, uneventful January FCC Open Meeting yesterday (1/17/08). The first annual edition of these monthly events generally serves as a review of the preceding year (as in other years, we learned that much was accomplished due to the hard work of dedicated staff). But it did feature some navel gazing on the topic of broadcast finance which may be worth a look. Private equity funding has always been available to broadcast companies, and participation on Wall Street has often been the exception rather than the rule. But that is not stopping FCC Commissioner Michael Copps (D) from wondering about their fitness of private equity funds as a steward of our national airwaves.

RBR observation: If not 2008, why not 2009? If Copps, Adelstein or another like-minded Democrat takes over the FCC's center chair, they could certainly kick off such a project. However, we would point out two things which we hope will ease Copps' mind at least a little. First, at a time when broadcast companies are having difficulty posting healthy revenue results, it is a good thing for people with cash to come in and put some capital into the business in order to better serve the public. Second, since the "hardware" of a broadcast company -- the broadcast station -- is licensed by the government, any and all transactions are available for regulator scrutiny. Say for example that XXX Broadcasting tries to sell a group of stations to a loosely-independent company like ZZZ Broadcasting, a sham corporation which is in fact traceable back to XXX, in order to put false profit on the! books and jack up the stock price. Such a move would be spotted instantly by the very FCC Copps works for as currently structured. Corporate malfeasance is much more difficult to pull off for companies public or private that operate in a government-licensed arena.
01/18/08 RBR #12

WGA Strike Central, Day 75
DGA strikes tentative deal
with AMPTP
The Directors Guild of America has reached a tentative deal with AMPTP on a new three year contract, after only six days of negotiation. The pact was announced last Thursday afternoon. Most say the next round of WGA talks (they collapsed most recently on 12/7) will be based on how DGA's contract is crafted. The new contract addresses compensation of union members for use and re-use of their work on the net-hopefully the framework will be acceptable for future WGA talks. DGA will be presenting the deal to its 13,500 members for ratification. DGA negotiations began 1/12 and were held at AMPTP headquarters in Encino, CA.
01/18/08 TVBR #12

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