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Volume 22, Issue 131, Jim Carnegie, Editor & Publisher

Wednesday Morning July 6th, 2005

Radio News®

RBR First
Introducing FigMedia 1
In our RBR observation yesterday - Battlefield Mgt. now Needed - on why radio stocks and the companies are in the 'Read'em and Weep' column of business, 07/05/06 RBR #130. One key element missing today in many of radio's upper management structure is the front line management with programming experience, but as quick as one could put out an S. O. S. - RBR confirmed late last night that Bill (Fig) Figenshu, Citadel Broadcasting's West Region President parted company and formed FigMedia 1 effective immediately, like this morning he is open for business. The departure will surely leave a major gap in Citadel's upper management structure with 70 stations under Fig's guidance. Fig told RBR "The time is right, I am of the right front line experience and it is time to put my 30 plus years to work and help improve our radio business." Late at deadline Citadel's COO Judy Ellis was unavailable for comment but we shall attempt to speak with her this morning. Publisher note: I didn't believe it either but yep Fig's doors are open at FigMedia1.com

Frist asks drugmakers
to cut back on launch ads
Bill Frist (R-TN), who is both the majority leader of the Senate and a medical doctor, is calling for limits on pharma advertising - - in particular, he wants a two-year moratorium for newly-introduced drugs. Meanwhile, a report says that drug companies are cutting back on advertising regardless. Frist says that advertising by pharmaceutical companies is one of the causes of rapid increases in medical costs overall. In the case of newer drugs, it is especially egregious, in his opinion, because the ads pose the risk of overselling benefits, underselling drawbacks and creating artificial demand. He is asking for voluntary industry compliance, but at the same time is requesting a GAO report on the topic which could become the basis for legislation, according to a report in USA Today. Former House Commerce Committee chair Billy Tauzin (R-LA), who now heads a major pharma trade organization, said his group would look into the matter, keeping in mind it would be reluctant to sacrifice any of its free speech rights. At least one watchdog was pleased by Frist's plan. President of AIDS Healthcare Foundation Michael Weinstein said, "This is a long-overdue and welcome step in the right direction to regulate an industry that has been allowed to run rampant and profit at the public's expense for far too long."

| Read Weinstein's comments |

Radio revenue inches up 1% in May
Radio revenue inched up 1% across nearly all sectors in May, according to the RAB. Grand total combined spot and non-spot dollars, local ad sales, national sales figures, and total combined local and national ad sales all grew by 1% in May 2005 over May of 2004. Non-spot revenue for the month remained flat compared to May of last year. Year-to-date growth for radio mirrored the results of the month of May with the exception of national dollars, which climbed 2% during the first five months of 2005 compared to those same five months from a year ago. The Sales Indexes for the month of May 2005 are: local, 136.3; national, 139.1; total combined local and national, 136.8. From a year-to-date perspective, the indexes are: local, 141.7; national 144.5; and total combined local and national, 142.3.

Young lowers the hurdle
Citing problems in the San Francisco market and depressed national sales, Young Broadcasting Inc. chairman Vincent Young announced a lowering of the bar for the company. YBI announced 5/6/05 that it expected to bank 205M-209M in net revenue by year's end - - that range has now been reduced to 200M-204M. Expectations for Station operating performance, stated earlier at 47M-50M by year's end, have been knocked down to the 42M-40M range. The earlier numbers had already been adjusted for the not-unexpected loss of 27M in net political revenue, a typical odd-year hit for most television groups. "This revision to the 2005 outlook comes despite strong local sales resulting from new business initiatives at our stations," said Young. "This local sales growth has been offset by continued weakness in the San Francisco market and in our national sales across the country." Are brighter days ahead? Young thinks so, saying, "This new outlook does not, however, alter our optimistic view of 2006.

Quote us on SCOTUS, Part 5
We continue with more commentary from interested parties regarding the Supreme Court's Monday triple play involving Brand X, Grokster and confidential source shielding. Today: A consortium of local government organizations on Brand X, with IEEE's Andrew Goldberg and Public Knowledge's Gigi Sohn weighing in on Grokster. We're fresh out of shield comments in this final installment of the SCOTUS series.

| Read their comments |

Florida shuts down two more pirate stations
Florida state agents silenced two more pirate radio stations last week and arrested two operators whose broadcasts have been interfering with a student-run station since May. Agents with the Florida Department of Law Enforcement arrested Marquis McDonald, 23, and Rasheem Oriley, 26, on charges of unauthorized transmission of a radio station. The arrests are under the new state laws making the operation of pirate radio stations a third-degree felony. Agents with FDLE and the FCC received a complaint Thursday from 88.5 FM (WKPX), a nonprofit, independent rock station run by students from Piper High School in Sunrise, FL and Nova Southeastern University. The two pirate stations, at 89.5 and 88.7 FM, were interfering with their signals. Jon Farley, WKPX-FM's manager said those and other pirate radio stations often flood the airwaves with profanity. People then call his station to complain. "It makes us look bad in the public eye and causes us trouble," Farley was quoted as saying.

Adbiz©

Ford Matches GM, Chrysler with employee discount plan
Ford will match General Motors and Chrysler in offering an incentive through Aug. 1 that gives all buyers the same discount as employees. The program, the "Ford Family Plan,'' will begin today and apply to 2005 models, spokesman David Reuter said in an interview. Yesterday, GM said that its program, which contributed to a 47% increase in June U.S. sales, will be extended to 8/1. Chrysler, which like Ford didn't match GM's program in June, begins its offer today as well. Under the Ford offer, customers will be offered reduced prices and cash rebates. For example, the XLT version of the Ford Escape SUV will have a discounted price of 23,335 compared with the normal 26,070, Reuter said. Customers will be offered an additional 2,000 off, putting their final cost at 21,335, he said. Dealers were being notified yesterday of the plan's details, and the first ads will go out today. The program doesn't apply to Ford Mustang and GTs and the hybrid Escape SUV. A previous incarnation launched earlier this Summer allowed each of its 300,000 employees and retirees to give the special discounts to up to eight people this year. Under that plan, which runs through 9/30, employees and retirees will get 50 in cash for the first sale they sponsor, 75 for the second, 100 for the third, 150 for the following four sales and 175 for the eighth sale.

British Airways launches review
after 23 years with Saatchi & Saatchi
British Airways is inviting agencies to bid for its 106 million account for the first time in a decade and after a 23-year relationship with Saatchi & Saatchi. M&C Saatchi has been asked to pitch for the account again, an airline spokeswoman said on Tuesday, adding that it is crafting a shortlist of four or five firms to join the process. "It is British Airways policy to review all major contracts across the business in line with their corporate procurement policy," M&C Saatchi CEO David Kershaw told Reuters. "We obviously respect this and look forward to participating in the review in order to continue our successful partnership." ZenithOptimedia will continue to handle buying and planning for British Airways.

Drug advertising goes into a slump
Just as the pharmaceutical industry comes under senatorial fire for its advertising practices, Nielsen Monitor-Plus says that the 388.5M spent on TV drug ads in Q1 2005 represents a drop of some 44M spent in the same portion of 2004. Some decreases were the result of controversy surrounding particular drugs, and others came about because advertisers had trouble adequately touting the benefits of their product while at the same time stipulating risks as required, all within a mere 0:60 seconds - - there are, in other words, questions about the effectiveness of ads which are forced to include negatives about the product. For example, TAP Pharmaceutical went from spending 18M in Q1 2004 to zero in Q1 2005 because it couldn't squeeze pros and cons into the standard time frame.

Media Business Report

RAEL Study documents "Power of TV," says TVB
The Radio Ad Effectiveness Lab recently released a study on "Radio's Return on Investment Compared to Television." It demonstrated that radio's return on investment is higher than television. The Television Bureau of Advertising said examined the study in detail and says, it provides data that strongly "supports the effectiveness of television." Only by adding several layers of estimated costs does RAEL attempt to position the findings in a positive ROI light for radio.

| More |

MBR observation: Well, we often see TVB and CAB going at each other, why not the TVB and RAB? While we welcome RAB's response to this TVB study, we would like to provide a quote from Carat Americas CEO David Verklin, on the effectiveness of using more media together on a campaign: "I'll give you a very simple fact; call it 'Verklin's Law.' ROI is directly proportional to the diversity of the media mix and the degree of interactivity in the media plan. We have seen that fact through our market mix modeling analysis of over 800 brands." Point being: All media is effective, it's how you use it and how different types of media are used in conjunction with each other that gets the job done. Therein lies the talent and mastery of ROI. Media shouldn't always be so quick to dismiss their brethren, but to show how well they can perform for a client when used together. Conglomerates like Time-Warner and Viacom probably have plenty of internal studies proving just that. Care to share?

Radio & Television Business Report

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Media Markets & MoneyTM

Disney sell-off begins?
Radio Disney has been mentioned prominently in the latest round of stations-for-sale rumors, and now one of them has indeed been sold. But we don't think you need to run off and contact your broker just yet - - this looks like more of a prune-the-garden move than a prelude to a big group sale. The station is WQUA-FM, which serves the Mobile AL market from its Citronelle AL city of license. Radio Disney bought the station back in 2002 as a rare FM outlet for its Children's format, paying 1.5M. It's taking a bit of a haircut - - a trim, really - - on the resale. It'll get 1.25M from Jimmy Swaggart's Family Worship Center Church Inc.

Washington Beat

Senate panel set to tee up DTV transition
Senate Commerce Committee heads Ted Stevens (R-AK) and Daniel Inouye (D-HI) are ready to navigate waters explored over a month ago by their counterparts in the House - - the DTV transition. The duo is setting up for a thorough airing of issues, scheduling a rare double session for 7/12/05, with the full committee convening in the morning and again that afternoon. The 5/26/05 House hearing concluded inconclusively - - a draft bill was in the hands of staffers and was under negotiation. The biggest sticking point was what to do about those left behind on the day analog goes dark with nothing but over-the-air analog receivers. Democrats were generally in favor of liberal government intervention to make amends with such individuals in the form of digital-to-analog downconverters. Republicans were in favor of limited or no government subsidies - - partly because they expect more and more consumers to make the issue moot by moving over to digital equipment on their own. One thing Republicans and Democrats did see eye to eye on was the date the DTV transition would become a reality: 12/31/08. Other issues cast a large shadow over completing the transition, not the least of which is multicast must-carry. Witnesses lists are not yet available.

RBR observation: Although there is still no official document on the DTV transition in the House, look for the 12/31/08 date to be affirmed by the Senate. We also expect that some of the Republicans on the committee will take a position closer to the Dems on the matter of subsidies.

Ratings & Research

Whiting resists mandatory accreditation
In our recent interview with President & CEO Susan Whiting, RBR/TVBR asked, why won't you agree to mandatory accreditation and how do you think the MRC (Media Ratings Council) could be more effective in this?

"The issue has been raised, but we feel, and this is based on a lot of research and a lot of years of experience, that you can't agree to mandatory accreditation without raising really serious issues under antitrust laws, both federal and state, because in order to do that you'd have to agree in what the standards were. And when you have one group of clients who compete with other clients, putting a process in place like that, it raises serious antitrust issues. And I think part of what happens with this issue is that clients think about the world as they see it today. And in spite of, I'm being very direct, being called the monopoly, we aren't. There are no barriers to prevent other people from entering this marketplace. You have to think about a marketplace where there are different companies essentially getting into the business. And you'd have to apply and make sure you had a process that was fair to all of them, and we look at the world that way. The second thing is that if you had to have a mandatory process of accreditation before you could make any changes, we would absolutely slow down if not stop innovation that's required for television. And I know, in talking to a number of broadcasters who signed that letter, as Jack Oken did, that not all of them were in favor of mandatory accreditation. They certainly are in favor of us working more closely with the MRC, which we are doing, but mandatory accreditation from a legal point of view just cannot be acceptable. I think the business reasons and the legal reasons are pretty straightforward. The third thing is you can't really accredit a service unless it's up and operating. Just like universities have to start a program, run it and then it gets accredited, the service that gets accredited has to be up and running before you can do that and apply to audit.

Engineering

Using FM stations for
wireless broadband delivery?
A new communications tool that can use FM (or TV) stations' signals could enable broadband internet services for on-the-go wireless devices or hook-up homes that cannot yet get broadband web access. xG Technology, LLC, moved its spectrum sharing technology out of the lab and into the field in May, successfully conducting its first long-range wireless tests of xMax - an (RF) signaling technique that represents a new approach to the problem of spectrum overcrowding. Using a VHF paging channel and negligible power in adjacent sidebands, an xMax transmitter and receiver pair with ground level antennas delivered data to the xMax receiver over a mile away. RBR/TVBR asked xG Exec. Chairman Rick Mooers if an FM station could host such a service (The founder is Joe Bobier).

| More... |

Tower collapse near DC
DC area AM WCTN Potomac, MD, a Spanish language station, suffered a tower collapse from the severe weather on Friday night. The station was able to remain on the air using reduced power from a leaning tower that was still standing.

Transactions

45K WYMR-AM Bridgeport AL from Dade County Broadcasting Inc. (Evan Stone) to MG Media Inc. (Marvin Glass). 5K deposit, 17.5K escrow, 22.5K note. [File date 6/3/05.]

NA FM CP Panama City FL from Bible Broadcasting Network Inc. (Lowell L. Davey) to American Family Associations (Donald E. Wildmon). Part of a settlement agreement involving a number of mutually exclusive FM CP applications. [File date 6/3/05.]

Stock Talk

Most radio stocks saw minimal fluctuation yesterday, with just about everything staying within the 50 cent range. The biggest climber was Saga, up 80 cents. Westwood was the loser of the day, down 17 cents.

Radio Stocks

**Here's how stocks fared on Tuesday**
Company	Symbol	Close		Change	Company	Symbol	Close		Change
Arbitron	ARB		43.66	+0.11	Jeff-Pilot	JP		50.90	+0.21
Beasley	BBGI		14.30	-0.08	Journal Comm.	JRN		16.60	-0.10
Citadel	CDL		11.85	+0.10	Radio One, Cl. A	ROIA		12.72	-0.09
Clear Channel	CCU		31.03	+0.14	Radio One, Cl. D	ROIAK		12.74	-0.05
Cox Radio	CXR		15.84	-0.02	Regent	RGCI		6.08	+0.26
Cumulus	CMLS		11.73	-0.05	Saga Commun.	SGA		14.58	+0.46
Disney	DIS		25.03	-0.06	Salem Comm.	SALM		20.39	+0.46
Emmis	EMMS		17.77	-0.06	Sirius Sat. Radio	SIRI		6.61	+0.06
Entercom	ETM		33.46	unch	Spanish Bcg.	SBSA		10.16	-0.04
Entravision	EVC		7.91	+0.06	Univision	UVN		27.73	+0.03
Fisher	FSCI		47.90	+0.80	Viacom, Cl. A	VIA		32.65	+0.23
Gaylord	GET		46.99	+0.42	Viacom, Cl. B	VIAb		32.41	+0.23
Hearst-Argyle	HTV		24.82	+0.26	Westwood One	WON		20.37	-0.18
Interep	IREP		0.49	+0.02	XM Sat. Radio	XMSR		34.75	-0.07
International Bcg.	IBCS		0.01	unch	-	-	-	-	-

Bounceback

Send Us Your Opinions We want to
hear from you.
This is your column, so send your comments to [email protected]

Here's a reader who thinks we're too hard on satellite radio services, and perhaps not hard enough on terrestrial broadcasters.

I don't understand why your editorial board seems to take a swipe at the satcasters every chance they get. In yesterday's RBR you had the story on the iPod update. In your "observation" you note, ".....when WiFi/WiMax expand and in general the Internet becomes completely mobile, podcasting and satellite will take a major hit". You take, what seems like glee, in noting that the satellite broadcasters will take a hit, yet you leave out one group. The traditional broadcasters. Do you think the broadcasters will be immune to the WiFi/WiMax podcasting influence? | Read More... |

Scott Cason
President
LaGrange Communications, LLC

Arbitrends

Upped & Tapped

Steve Harris named ABCRN head of multicultural programming
We told you first (6/30 RBR #128), But now it's official: ABC Radio Networks announced Steve Harris has been named vice president of Multi-Cultural Programming, a new division of the company to be based in Dallas. Harris will report to Darryl Brown, executive vice president and general manager, ABC Radio Networks. In this new position, Harris will supervise ABC Radio Networks' Urban and Hispanic radio products including The Michael Baisden Show and The Doug Banks Morning Show, as well as The Touch, ABC's 24-hour Urban A/C format, and Rejoice! Musical Soul Food, the 24-hour gospel format. Harris will also oversee ABC's relationship with Spanish Broadcasting System, including the syndication of KLAX-FM's Renán Almendárez Coello-El Cucuy de la Mañana, WSKQ-FM's El Vacilón de la Mañana with Luis Jimenez and Moonshadow, and WXDJ-FM's El Vacilón de la Mañana with Enrique Santos and Joe Ferrero. Harris rejoins ABC Radio Networks after serving as vice president of XM Satellite Radio's External Programming division.

Stations for Sale

South Georgia Cluster
Two AM/FM combos
including one 100kw FM
and one 25kw FM in South Georgia.
Zoph Potts, Snowden Associates
(252) 940-1680
[email protected]

More News Headlines

Competing Media

June Digital Magazine
Now Available

National Sales:
EDI - Electronic Data Interchange, sometimes synonymous with Electronic Invoicing
Kathy Crawford, MindShare President, Local Broadcast, speaks her mind on EDI, specifically stating what solutions she needs from the software and keying entries to get stations faster payment in an exclusive column. States straight up, "Lest you should all think that our work is done in the world of EDI. Think again!" EDI- the focus of the future of national spot dollar. Who is and who isn't involved. From the rep firms to the software companies, we get answers. The Clock is ticking on EDI. Closure in '05?

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RBR Radar 2005

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

Radio stocks still soft at midyear
Broadcasting stocks improved ever so slightly in the past month, but the market is still pretty dismal. Through the first six months of 2005, only three radio stocks have posted gains. Even those Wall Street darlings of satellite radio, XM and Sirius, were down double digits for the first half of 2005. We don't expect to see any dramatic improvement until the economy really kicks into gear and advertising demand improves a lot. RBR observation: The field of dreams concept has finally ended and now for the balance of this year it will be interesting to see which CEO begins to pay attention to front line management. The first issue noticed is there are not too many CEO's with front line battle or management and programming experience. That is why we see so many quick knee jerk reactions to blowing up formats, flushing local brand identities along with their producing dollars in ad revenue. Best example that will be at the top of this format demolition of 2005 is the imploding of Oldies - WCBS-FM, NYC for who knows Jack. And what is next on the format horizon - we speculate with tongue in cheek - new format will be Jill. The stats tell the full story so print read'em and weep.
07/05/05 RBR #130

Where, oh where is the indecency?
What to make of the silence of the FCC in 2005 when it comes to indecency fines? At least one watchdog, the Center for Public Integrity, says that the quiet, and the zero-dollar fine level, is a result of the massive amount of fines and settlement agreements which hit the books in 2004. The chilling effect on program content many predicted would seem to be all present and accounted for. RBR observation: And all this without any action on the Upton/Brownback bills to drastically increase indecency fines. Where are those bills, anyway? We haven't heard a peep about them for months now, despite the fact that whenever they've actually been on the table they've seemed a mortal lock to take the fastest possible track to the desk of George W. Bush. Could it be that they will simply wither and rot on the legislative vine again, as they did in 2004? Stay tuned.
07/05/05 RBR #130

Burns introduces bill
to regulate Nielsen
Sen. Conrad Burns (R-MT) isn't backing down on his effort to have the federal government regulate Nielsen's TV ratings. He (and, presumably, New Corporation's Washington lobbyists) has even lined up three fellow Republicans as co-sponsors of the "Fairness and Accuracy in Ratings" (FAIR) bill - - George Allen (VA), Olympia Snowe (ME) and Mel Martinez (FL).
TVBR observation: It's no secret where we stand on this issue and if anyone has forgotten - the Gov. stay out as you will cause more harm to a medium that is already if deep trouble. 07/05/05 TVBR #130

New rules NPRM about to be teed up
FCC Commissioner Kathleen Abernathy told reporters that the Third Circuit order remanding the far-reaching 6/2/03 media ownership rulemaking will be dealt with at the Commission's next regularly-scheduled Open Meeting, due to be held 7/14/05 at 9:30AM. It will be a simple, non-controversial laying-on-the-table of the issues brought up by the Third Circuit. 07/01/05 RBR #129

Research Director
Univision and TeleFutura TV stations 4-6 years broadcast research required in medium to Top 10 market. Bachelor degree required. EOE. No phone calls, please. See TV Careers

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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