Welcome to RBR's Daily Epaper
Volume 23, Issue 131, Jim Carnegie, Editor & Publisher
Friday Morning July 7th, 2006

Radio News ®

Consolidation comes to the trades
It's official: Long time music/PD trade publication Radio & Records is being acquired by its chief rival, VNU's Billboard. R&R is expected to be a summer bride, with closing coming by 8/1/06. We do not know much about VNU's plans for handling the duo, but we do know this much: R&R publisher Erica Farber is staying aboard, but details (such as for how long) were not in VNU statement. The purchase of R&R likely ends speculation that the trade publishing pieces will be sold off once the VNU sale closes. Those other trades are Hollywood Reporter, MediaWeek, AdWeek and BrandWeek. VNU's press release claims that "R&R will continue to grow as a vibrant brand." VNU/Nielsen Entertainment exec Michael Marchesano said, "This acquisition is in line with VNU's strategy to further strengthen its services to the radio and record industries." R&R assets of interest include "print, Internet and digital services, research, and convention and seminar products..." Both Billboard and R&R are known for their airplay charts. Billboard's come from co-owned Nielsen; R&R's come from Mediabase 24/7, which is in turn associated with Clear Channel's Premiere Networks. Now this will be interesting to watch.

RBR observation: What do two old line print publications do when they wed? Your guess is good as ours, but we do know that given the similarity of what Billboard and R&R did, along with industry consolidation, probably left room for only one player. Beyond that, there is one obvious implication of this deal, obvious to us anyway. It means there is one less relatively independent source of business news and commentary for the radio industry. We will take this opportunity to remind our readers that RBR is 100% completely Independent. We are beholden to no group owner, no vendor of broadcast goods and services, and no international publishing conglomerate. We are not tethered to the next Wall Street quarterly conference call. Our only agenda is to further the business of radio, if for no other reason than because its health is critical to maintaining our own health. Can you blame us if we feel like the last Independent Radio Trade standing?

P.S. Anyone at R&R or Billboard getting cut from your job because of this consolidation then give RBR/TVBR Publisher & owner Jim Carnegie a call or email as we are always looking for the best in our business.

Advertisers still spending, but where?
While upfront TV spending was down this year, overall advertising budgets are on the upswing, according to a study conducted by research firm Schonfeld & Associates of Libertyville, Ill. The largest advertiser, automotive, is expected to increase spending in 2007 by 5.3% to $30.6 billion, with DaimlerChrysler, Fiat, Ford, General Motors, Honda, Toyota, Volkswagen and Volvo spending more than $1 billion each. Large food companies are expected to boost spending by 5.5% in 2007, to $27.2 billion. The largest food and overall advertiser, Nestle, plans to increase its spending by 9.1% to $17.2 billion. Pharmeceuticals will boost spending by 10.5% in 2007, exceeding $24 billion overall. Advertising by telecom services will jump by 6.6%, up to $24.2 billion, while wireless services will increase their spending by 8.5% to $12.4 billion. Computer manufacturers, including Hewlett-Packard and IBM, will increase ad spending by 5.3%, while software makers will boost spending by 9.1%. Retail department stores will increase spending by 7.5% to $4.3 billion, while lower-end variety stores, such as Target and Wal-Mart, will bump spending by 13.3% to nearly $8 billion. While advertisers may be increasing their ad budgets, they aren't necessarily directing those increases at TV: According to ZenithOptimedia, TV advertising is expected to hold steady at 37.2% of the overall pie, followed by newspapers at 29.8%, magazines at 13.4%, radio at 8.1%, outdoor at 5.5% and online at 5%. Of those categories, only online is showing growth. What's more, TV upfront spending was down a bit this year to $9.05 billion from last year's $9.1 billion.

RBR observation: We like to point out in forecasting the auto sector of the eight brands above. Go ahead scroll up and you will see that five are foreign manufacturer brands. Foreign will soon dominate the auto category so best start getting close to your local foreign auto dealer if you want their dollars. Last do not forget the China auto dealer as they will be a big spender in regional and local advertising.

Court sends indecency flap back to the FCC
Rather than plead their case before the Court of Appeals for the District of Columbia Circuit, network affiliate groups will take their case back to the FCC. At issue are fleeting instances of alleged indecency. The FCC thinks they're actionably indecent anyway, while the stations do not. Since the affils never got to explain their position directly to the Commission, both groups have agreed to try and resolve the issue out of court. FCC's David Fiske explained, "Today the Commission, supported by the ABC, NBC and CBS affiliates, filed a motion for voluntary remand and stay of briefing schedule in Fox Television Stations, Inc. v. Federal Communications Commission. It did so at the request of broadcasters who complained they did not have the opportunity to be heard by the Commission before it issued its decision in its 'Omnibus' order in March. Additionally, the remand would allow the Commission to hear all of the licensees' arguments which is necessary for the broadcasters to make these same arguments before the Court."

RBR observation: The guidelines put out by the Michael Powell FCC and officially adopted 4/6/01 included examples which spelled out with the utmost clarity that a fleeting and inadvertent use of even the ever-vilified f-bomb was not considered to be an indecent incident worthy of a fine. Here's an FCC statement discussing one such incident: "The broadcast contained only a fleeting and isolated utterance which, within the context of live and spontaneous programming, does not warrant a Commission sanction." And another: "The news announcer's use of a single expletive does not warrant further Commission consideration in light of the isolated and accidental nature of the broadcast." And how about this, on a Geraldo Rivera report called "Unlocking the Great Mysteries of Sex" which really got into some issues: "While offensive to some, the material was not found to be indecent." The Bono/Golden Globe f-bomb changed all that, by FCC decree. The f-bomb suddenly became indecent 24/7, under any circumstances. Oh wait, unless Spielberg used it in a patriotic movie. Then it's OK. This is clear to everyone, right?

Sirius and XM add one million more
XM and Sirius announced close to 1 million more subscribers in Q2. Sirius added 600,460 for a total of 4.68 million subscribers, 158% higher than Q2 2005. XM added 398,000 subscribers for 6.89 million total. Doing the math, there are now 11,570,000 satellite radio subscribers between them. Looks like Sirius is catching up. It added far more subscribers than XM in Q2, beating analysts expectations and continuing to benefit from Howard Stern. XM's subscriber growth was well below the 568,900 it added in Q1. Analysts had been looking for about 430,000 net additions, according to Oppenheimer analyst Thomas Eagan. Analysts had been expecting 555,000 additions for Sirius, Eagan was quoted as saying. In May, XM cut its estimates for FY subscriber growth, due to softness in retail sales and product availability problems. XM currently estimates 8.5 million subscribers by the year's end, down from its previous estimate of 9 million. Sirius expects to meet its previously issued forecast of getting to more than 6.2 million subscribers by the end of the year.

RBR observation: Meanwhile, Sirius CEO Mel Karmazin reportedly told attendees at a conference last week "We'd love to buy XM." The two, per FCC mandate, are working on an interoperable receiver that would pick up both companies' channels. With all the competition from iPods, the Internet and higher-end wireless phones, a merger may be a means to profitability, at least a quicker one. Now regulatory hurdles would be an issue, but not necessarily a brick wall. Needless to say, if XM and Sirius could lower their subscription prices via a merger, many more would sign up. If, via an interoperable receiver, consumers could get 200+ channels (why duplicate the CNNs, CNBCs, etc-add more music and creative content channels) at a lower price, it could be a big leg up for the satellite radio biz. But one suggestion-if they add more channels, some of them should be existing radio stations. Many of us would like to hear the KCRWs, The KROQs, the WINS-AMs and the Indie 103.1s out of market. Here's a way to further blur the divide between different forms of content delivery and help traditional radio in the meantime. Remember, it's all content, how you deliver it is becoming less and less of a factor.

Kerry grafts his small business interest
onto broadcast ownership

John Kerry (D-MA) is the ranking member on the Committee on Small Business and Entrepreneurship, and also sits on the Commerce Committee. He is now claiming credit for using the latter position to promote the interests of smaller businesses, and particularly, having the FCC look at promoting increased diversity of broadcast ownership before it takes up the issue of further ownership deregulation. Said Kerry, "Media consolidation is making it harder for everyone to compete in the industry, especially small businesses, minorities and women. Ownership should reflect the diversity of our country, not defy it. The FCC should be enhancing minority participation so that independent voices and community concerns are not drowned out by big conglomerates." Kerry says was amendment was agreed to unanimously. Another provision of the Commerce Committee's telecom bill, now known as the "Advanced Telecommunications and Opportunity Reform Act," inserted by Byron Dorgan (D-ND) with unanimous approval, are instructions to the Commission to air its plans before taking any rulemaking action on media ownership.

RBR observation: The question is this: Will Congress act on the telecom matter before the FCC's comment period runs out? Does the FCC have to wait around for action on pending legislation before it can do anything? There would appear to be excellent odds that Kevin Martin will be able to kick the FCC in gear much faster than Ted Stevens (R-AK) will the Senate, much less then getting an agreement with the House of Representatives. That said, the best way to help get minorities and small businesses into broadcast ownership are tax certificates. John McCain (R-AZ) has tried to revive them before, and he and like-minded senators should keep trying. Stay tuned.

New Fisher CEO likes radio-TV synergy
As a TV veteran of Gannett, Lee and Belo, Colleen Brown is also overseeing radio stations for the first time as the new President and CEO of Fisher Communications. In a recent interview, RBR/TVBR asked what she'd found that she didn't expect about radio. "The call to action that radio provides. I certainly knew it and understood in my mind that's one of the things that radio does well. But actually living it and seeing how it works - literally making a call to action and raising immediate funds - there's just an amazing responsiveness to radio. That's what I didn't know," Brown said. We asked, do you see any particular synergies with having radio and TV in the same market, as you currently do only in Seattle? "I think there is great synergy, depending on the radio stations you own and the television assets you own. We have a strong a news and the good talk radio station with KOMO-1000 and KVI and both AMs are strong compliments to what we do everyday with our television asset. I think there's a great compliment. I can't say that's always the case with everything. For example, we have KPLZ which is a great music station - it's just not as easily complimenting what we might be talking about on the news." Since our interview, Fisher has announced a deal to sell its small market radio stations, but will retain its radio-TV combination in Seattle. Read the entire interview with Colleen Brown.
| May issue of RBR/TVBR Solutions Magazine |

Wall Street Media Business Report TM
More dog and pony shows on the schedule
Television owner Sinclair Broadcast Group has staked out its corner of Wall Street for the purpose of announcing and explaining its Q2 revenue results. It will take to the wirelines via conference call on 8/2/06 bright and early, especially for those of you on the west coast. How does 8:30AM eastern time grab you Angelenos? Then, a week later, Viacom, the portion of the bigger Viacom split of interest but of less interest to broadcasters than CBS but still of interest, will hit the lines and the Internet. The 8/9/06 session will be much more accommodating to our west coast friends, kicking off at 4:30PM. But not to worry in either case: As always, we promise to listen in so you don't have to.

Ad Business Report TM

Chrysler incentive program
a bit controversial with dealers

While we reported yesterday Chrysler Group gave consumers a chance to celebrate the Fourth of July a little longer by extending its hours throughout the holiday weekend to help launch the new incentive drive for the summer which includes a 30-day guarantee, a revival of employee pricing for all customers and free financing, we've heard the program isn't being all that well received by dealers. Sources tell us the dealers did not want this employee pricing because it really removes pricing flexibility from deal making. In other words, here's the price, take it or leave it. Now, with that, Chrysler (different from last year) is in the unenviable position of probably having somewhere around 640,000+ units unsold right now, sitting around. So they're jamming these vehicles down dealers' throats which doesn't make them all too happy, either. The premise is, "Wait until the last quarter when we've got all this new product coming. In the mean time, we've got to clear the decks." In the meantime, a lot of the dealers are saying, "Hey, I'm the guy you're asking to finance these things-I'm going down for the count if you're not careful."

RBR observation: Remember, last year in June, GM was the only one with the employee discounts. It artificially heightened the June numbers. Then Ford and Chrysler jumped in July, which is about where we're at this year. But here, GM has been reticent because they know that they can't go back up that road. Chrysler is kind of going this alone right now. Ford hasn't jumped in as much this year.

Media Markets & Money TM
Cox puts Jacksonville cluster into fifth gear
That just represents the FM side, once a deal to acquire WBGB-FM from Salem Communications closes. Cox radio exec Robert Neil called the 7.7M transaction "...a unique opportunity to fill out a cluster in a key market." The cluster also includes an AM, WOKV-AM. The other FMs are WAPE-FM, WFYV-FM, WJGL-FM & WMXQ-FM. The cash deal is expected to close later this year.

Schurz expands into SD
Brokerage firm Kalil & Company report that Franklin Schurz's Schurz Communications Inc. has reached an agreement with David Benjamin and his Triad Broadcasting to acquire an intact six-station cluster in Rapid City SD. According to Kalil, the cluster includes "KAT Country 98.7 (KOUT-FM), CHR 'Hot 93.1' (KRCS-FM), AC 'Magic 93.9' (KKMK-FM), Classic Rock 'The Fox 100.3' (KFXS-FM), 'Five State Farm Radio' (KBHB-AM 810) and 'Cool 92' Oldies (KKLS-AM 920)." Schurz, who also owns and operates radio stations in South Bend IN and Lafayette IN and also has interests in television, cable and newspaper, said, "We are extremely pleased to welcome these fine radio stations, talent and staff to our organization. We started our first radio station in 1922, and we are a family company with a commitment to local radio, local programming and community involvement. The Triad Rapid City stations are a perfect fit for our firm, and we look forward to a successful future together." The pricetag was not disclosed.

Washington Media Business Report TM
I might be moving to Montana soon...
Anyone out there recognize that classic line from the late great Frank Zappa? Anyway, it is now a matter of public record that the FCC is putting some Montana television allotments up for grabs. They're being offered as digital facilities, and the short list includes Channel 46 in Kalispell, Channel 21 in Great Falls and Channel 16 in Billings. The window of opportunity requires submission of an FCC Form 340 by no later than 8/9/06. There is, however, one catch which may dampen the enthusiasm of many of our readers. All three stations are allocated as non-commercial facilities.

Engineering Business Report TM
iBiquity Digital launches new B2B website
iBiquity Digital announced its new corporate website is now live at www.iBiquity.com. The website has been redesigned and expanded to better provide iBiquity's current and future partners access to HD Radio information and materials tailored to the needs of their individual industries: automotive, broadcasting, equipment manufacturing, and retail. It also includes a retooled "Press Room" section for the media. Consumers seeking information on HD Radio programming content and listener benefits can link directly from the iBiquity website to www.hdradio.com, which is administered by the HD Digital Radio Alliance.

CC Radio expands emergency preparedness capability
In the face of another hurricane season, CC Radio has rolled out multiple backup hubs and developed an emergency satellite system to ensure communication throughout markets when disaster strikes. Radio transmitters, studio equipment and news gathering packages have been installed in trucks and RV's at Clear Channel Radio hub cities across the country. The hub cities will also house generators, satellite phones, fuel and supplies, even a portable tower on a trailer. Emergency backup satellite system will enable any of the company's local radio studios to broadcast their local programming directly to any of the company's tower sites when microwave links or land lines are down or fail. If emergencies force Clear Channel news teams and announcers to abandon their studios, the satellite equipment will enable the station crews of affected areas to broadcast from alternative, nearby locations to provide their listeners with valuable and up-to-date information. Several hub cities have already been set up with a focus on hurricane-prone areas. Remaining hub cities will be in service before the end of the year. The support equipment will be located at Clear Channel Radio hubs cities spanning the U.S., strategically placed to be no more than a day's drive from the local markets. There are six established hub cities: Tulsa, Philadelphia, Orlando, San Diego, Atlanta and Sacramento. The emergency backup satellite systems are now being deployed in all of the Gulf Coast states. Future deployments in expanded markets are also planned.

276K KDNS-FM Downs KS from Hoeflicker Broadcasting Corp. (Herbert R. Hoeflicker, Ruby J. Hoeflicker) to Dierking Communications Inc. (Bruce E. Dierking). 4K escrow, balance in cash at closing. Includes non-compete. Duopoly with KZDY-FM Cawker City KS, coming from same seller. [File date 6/13/06.]

175K KZDY-FM Cawker City KS from Waconda Broadcasting Corp. (Herbert R. Hoeflicker, Ruby J. Hoeflicker) to Dierking Communications Inc. (Bruce E. Dierking). 4K escrow, balance in cash at closing. Includes non-compete. Duopoly with KDNS-FM Downs KS, coming from same seller. [File date 6/13/06.]

Stock Talk
Almost all quiet on the broadcast issue front
If you want our two cents worth, you'd look at Gaylord and Hearst. They each gained that much on a day when most broadcast stocks stayed within a dime of where they started the day. Salem dropped almost a dollar though. Did investors put that much stock in its departing Jacksonville FM?

Radio Stocks

Here's how stocks fared on Thursday

Company Symbol Close Change Company Symbol Close Change













Journal Comm.







Lincoln Natl.







Radio One, Cl. A




Citadel CDL
8.91 -0.03

Radio One, Cl. D




Clear Channel








Cox Radio




Saga Commun.








Salem Comm.








Sirius Sat. Radio








Spanish Bcg.
















Westwood One








XM Sat. Radio













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Below the Fold
Wall Street Media Business Report
More dog and pony shows
Sinclair Broadcast Group has staked out its corner...

Ad Business Report
Chrysler causes controversy
Incentive program making local Dealers little upset they did not want this incentive program...

Media Markets & Money
Cox puts Jacksonville cluster
Into fifth gear...

Washington Media Business Report
Might be moving to Montana

FCC putting some TV allotments up for grabs...


Market Results
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| Nashville |
| Oklahoma City |
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NBA Minute

Stations for Sale

Seller Financing of
2 New C-3 FMs

Serving the beautiful resort area of Mountain Home, AR.
Turnkey package.
Lease to Own to a qualified buyer.
Complete information at www.mountainhomeradio.com

Radio Media Moves

Parker parks
at Presslaf

Broadcast database marketing firm Presslaff Interactive Revenue has expanded its management team, adding Jerry Parker as Vice President of Operations. He'll be working on product development, new technologies and business opportunities. Founder Ruth Presslaff said, "Jerry's entrepreneurial experience, plus his years in the broadcast business bring a seasoned and appreciated perspective to what we do."

Digital Magazine

Take a look at what's in the June RBR/TVBR Solutions Magazine:
Valerie Geller, President/Geller Media, writes, "Put resources back into News/Talk radio." Cutting it to the bone isn't working. If you want to win in the format, the "next big thing" will be to give news/talk radio back the resources it needs to win.

Jim Farley, VP/News and Programming, handles WTOP, Washington Post Radio and Federal News Radio (Bonneville DC). He talks about coordinating the news flow back and forth from WTOP, WFED and Washington Post Radio; How he finds and cultivates local talent; what he thinks about radio cutting news operations a bit too much across the country; and more.

GM Talk: What do GMs look for in talk programming-are they looking to fill a demo or are they looking for a certain personality? How do they choose one over the others?

These and other hot industry issues addressed in June.

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RBR Radar 2006
Radio News you won't read any where else. RBR--First, Accurate, and Independently Owned.

Ion and Sony Pictures Television strike content deal
Ion Media Networks (formerly Paxson) and Sony Pictures Television announced a programming agreement that provides Ion with the rights to broadcast dozens of classic television series.

RBR observation: Wonder why we ran this TV news story? OK it is called cross platform marketing. What do the mentioned programs like "Charlie's Angels," "Starsky & Hutch," "The Partridge Family," "The Monkees" all have in common? They all attract a money demo of boomers. Any local Oldies format personality station should be locking into this with promotion and even putting together a TV / Radio station weekend program with your on-air talent. Plus the oldies format plays their music. There is a tremendous up sale in promotion and ad revenue. Work together as RBR is sure any Ion manager would like to talk ideas with you.
07/06/06 RBR #130

Publisher Perspective: Get a Brown paper Bag and Breath Deep
Universal McCann Ad guru Bob Coen's 2006 forecast for radio has fallen off a cliff since his optimistic prediction in December that both national and local would grow 4% this year. Either agree or disagree the bottom line is radio does not have front mind awareness and is being overlooked and treated as old media lacking any hint of New Media buzz. As one high level CEO told me, "Ad Agencies just do not believe in us (radio) any more and we did it to ourselves." Yep, not everyone in radio is doing wrong, only the ones that continue to grab the press headlines. The bickering, lack of forward movement in all areas of our radio business is driving the wooden spike deeper and in some ways there is a cancer Inside of Radio that has to be cut out for radio to be saved and regain a healthy body. Here is the good news - many if not most in all media still have their heads back in 2003 and learning the Internet. Some are fighting to improve but do not feel bad as for my observation the media playing field is still level in all media sectors. More see
07/05/06 RBR #129

RBR Analysis
Ready, Set, Start 2nd Half '06
With No respite from Wall Street's disrespect if you thought Q1 of 2006 was bad for radio stocks, things only got worse in Q2. Halfway through the year, only 11 radio stocks are ahead of where they ended 2005. Now is not the time to play Follow the Leader. We also recommend if you have not explored any of the E-commerce media services do so now. With this in mind, Breath Deep and do not shoot the messenger. We just compile the data for you. Print the Chart and keep pace, view here
07/05/06 RBR #129

FCC Democrats express
misgivings about NPRM
In Asheville NC, Michael Copps and Jonathan Adelstein were talking as if a rerun of the FCC 6/2/03 media ownership rulemaking is a done deal. Clear Channel was there too, in the person of Ken Salyer, VP/MM of the group's local cluster touting the benefits to the community conferred by his company's size. That opinion was countered by frequent Capitol Hill testifier James F. Goodmon, President & CEO of Capitol Broadcasting Company. "Clear Channel didn't buy these stations to do 'Tools for Schools,'" he said. "They did it to make lots of money. It's not about serving the community or local autonomy. They want these stations because they want more money."
06/30/06 RBR #128

Hispanic consumers spend a
lot of time listening to radio

Heavy users of radio, spending significant time, in particular with Spanish-language radio, according to a new study from Arbitron. The U.S. Hispanic population is growing rapidly and is now the biggest minority in the country. Arbitron's new study - Hispanic Radio Today 2006 - shows that radio reaches over 95% of all Hispanic Americans over the age of 12. While the average Non-Hispanic consumer listens to an average of 19 hours and 15 minutes of radio per week. View the complete study and details and use it in your Sales

Editor's note: Look for the Special report: "The explosion of Hispanic radio formats and TV networks" in the August issue of Radio & Television Business Report.
06/28/06 RBR #126

Hogan trying to put
positive spin on PPM conflict
There's still no word on whether Clear Channel will invite CBS Radio, Emmis, Bonneville and such back to participation in its Next-Generation Electronics Ratings Evaluation Team, but CC Radio CEO John Hogan is trying to explain why his company was in talks to do the same thing they did - sign a contract for Arbitron's Portable People Meter (PPM) before the Next-Gen group completes its evaluation of PPM and a rival system from The Media Audit/Ipsos.
06/27/06 RBR #125

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