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Volume 22, Issue 135, Jim Carnegie, Editor & Publisher

Tuesday Morning July 12th, 2005

Radio News®

iPod overrated,
and other mullin' from Smulyan
Emmis Communications uberhoncho Jeff Smulyan took to the company's website to discuss the general state of affairs with his company. He said that the company's recent Dutch auction resulted in 40% of publicly traded common shares coming home to roost. He said the stock's price and the upcoming sale of the TV division made the buyback an excellent use of resources. More of the same may be in store, depending. He said that the TV group, featuring both attractive signals and markets, is attracting significant interest and higher-than-expected numbers. Part of the reason, he believes, is good old supply and demand - - when it comes to television stations, there just hasn't been very much stock on the shelves lately. He said there were no plans to spin the magazine division. Discussing Emmis' optimistic outlook on radio, Smulyan said "Wall Street is skeptical of all media right now, but we're seeing data on satellite and iPod consumption that show us that some of the threats against terrestrial radio are overblown. The results of industry ad studies and the NAB marketing campaign also show us that this industry is looking better than the conventional wisdom might indicate."

RBR observation: We do agree with Jeff that much is overstated but we have to point just one finger at the Street as it is their job to move the market on new gadgets. iPod has its place in the consumer media mix as the consumer is always in control. Remember this fact then remember all radio stay focused on local content and presentation. Satellite and iPod can not and will not replace local and the loyalty factor as in the case of WCBS-FM. Local wins every time.

Redstone inters megamedia conglomerates
"The age of the conglomerate is over," said Viacom ultrahoncho Sumner Redstone to reporters at the annual media bigwig summit in Sun Valley ID. "Sometimes divorce is better than marriage," he added, according to the Associated Press. Redstone was explaining the split of Viacom into two separate operating entities. The conglomerate version kicked off in earnest with Viacom's acquisition of CBS Corp. in 1999. Redstone said the giant company did not have the maneuverability necessary in today's business environment. Further, he wanted investors to be able to pick the Viacom businesses they were comfortable with rather than being force-fed the entire package. The plan calls for the company to be divided into two units: a high multiple/fast growth unit built around Viacom's cable and studio assets under Tom Freston, combined with a stable, cash-flowing unit attractive to yield investors based around the CBS network, broadcast stations and other assets under Les Moonves.

Goldman Sachs sees 2% increase in 2005 radio revs
Analysts Mark Wienkes and Kristin S. King have put together a simple analysis of radio revenues, which monetizes three industry trends in coming to its 2% result. 2% is the expected revenue growth for the industry when the advent of January puts 2005 into the history books. Trend #1 is less-is-more: GS says that the net impact of the Clear Channel/Infinity initiative will be a loss of 1.5% of revenue due to simple inventory reduction. Trend #2 is continuation of a steady decline in time-spent-listening (TSL). GS says 1.5% of revenue will be lost based on "acceleration of approximate 1% TSL erosion. Coming in to save the day if Trend #3 - - a 5% pricetag increase, a number they say comes from "...a proprietary survey and our broader Goldman Sachs media team advertising forecast." BTW, GS notes that the brand spanking new Jack format is designed specifically to try and reverse the TSL trend, and early indications are that it's working. More to come...

NAB takes the DTV battle
to Capitol Hill
The battle over the specifics of the DTV conversion can only get hotter. As the easier hurdles are cleared, even more attention is focused on the remaining toughies. One of those is multicast must-carry. NAB is running a tightly-focused ad campaign designed to reach the Americans with the most control over the DTV rules of the road - - the members of Congress. The print ad, going into a variety of Hill publications, features the headline "Here is the only choice cable companies want you to have," over the picture of a simple on/off device. The ad labels cable as a collection of monopolies at just about every opportunity. Here's part of the text of the ad: "You should be able to receive three, four, five, or even six channels from each local station. So consumers might get a channel for 24 hour local weather, another with your primetime lineup, another with foreign language simulcast, and still another with expanded coverage of local news, entertainment or even high school athletics. But you won't get these choices no matter what you pay for cable or satellite service if the giant cable monopolies get their way. They want you to see only what they own or produce themselves." It closes, "Congress should require the cable monopolies to give viewers all the choices broadcasters offer."

RBR observation: We're already getting full-time weather channels from some of the big network affiliates in our DMA (Washington). And HD radio is getting closer, which also offers the possibility for multicasting. We still remember the impact of Docket 80-90, when liberalized rules led to a round of move-ins and rimshot-building created a lot of hungry mouths which weren't getting fed the minute the general economy began to sputter back in the early 90s. That broadcasting fiasco was intensified by the presence of a lot of venture capitalists who did not really understand the biz. This time around, there seem to be more pros at the various helms, and the companies are of course much, much bigger. But antsy Wall Streeters are looking over shoulders everywhere, often taking patience out of the decision-making equation. To say the least, it is going to be interesting to see how all this plays out. All we're saying is that if/when an eight TV market suddenly becomes a 48 TV market, and radio goes from 40 stations to 120 or so, something is going to have to give.

Earnings season opens in earnest
We've already had the traditional Emmis preview. Now we kick into the meaty part of the quarterly earnings teleconference schedule. Up to the plate this week are pair of companies related by their pairing of the television and newspaper businesses - - Media General and Gannett. Media General will sit with analysts (with reporters lurking silently) on Tuesday at 11:00AM eastern, and Gannett follows suit a day later, Wednesday 7/13/05 at 10:00AM. Last week, Russell Investment Group analyst Ernie Ankrim told Reuters that a lot of companies have been lowering expectations - - 27% of 242 companies that pre-released Q2 earnings reports, against only 22.9% that revised upward. Ankrim said that tendency had more to do with managing stock prices and was not necessarily a sign of an economic slowdown.

Don Geronimo's wife killed in car crash
Freda Sorce, wife of Don Geronimo (Mike Sorce) of the nationally syndicated Don & Mike Show, was killed in a car crash on Route 90 near Ocean City, MD on Sunday. She was traveling westbound when a vehicle avoiding an eastbound accident swerved into the westbound lane hitting her car head-on. Mrs. Sorce, who was a frequent presence on her husband's radio show, was flown to University Of Maryland's Shock Trauma Unit in Baltimore where she died. Mike O'Meara, and most of the "Don and Mike Show" cast, decided to go ahead and do their radio show as usual at 3 PM Monday. Geronimo was not present. O'Meara said Geronimo had expressed his wishes for his radio family to do the show, which featured past live phone interplay between Don and Freda, who was almost a daily participant. Our condolences go out to Don & Mike, their families, the show crew and flagship station WJFK-FM DC.

Adbiz©

Cadbury broadens creative call for Dr. Pepper
Weeks before its annual meeting with bottlers, Cadbury Schweppes has widened the call for creative ideas on Dr Pepper within Y&R NY, its AOR since 1969. The call for additional creative contributions within the Y&R network, part of WPP Group, reportedly happened within the past month. The move allows more creative teams in the network to pitch ideas from other offices. Cadbury Schweppes spent 69 million on Dr Pepper in 2004.

Army extends contract with Leo Burnett
The U.S. Army, bogged down in awarding a new ad contract, extended its contract with its current agency, Leo Burnett, another six months. With the move, Burnett winds up with more than an extra year on an Army ad contract that was supposed to end last summer without getting competitive bids on the extension. Leo Burnett, part of Publicis, created the "Army of One" effort currently airing. The Army also said it would also sharply raise ad spending as it works to deal with recruiting shortfalls as well as the need to spend a bigger chunk of its yearly ad budget over the remaining six months of the year. The Army has been contracting its advertising account for 200 million a year, but Burnett's contract would be for up to 250 million in spending for the next six months. The Army had originally sought a new agency early last year, but after twice delaying the decision announced it would relaunch the review because of "inconsistencies in the evaluation approach" and had been expected to issue a request for proposals this week. The review will still be launched, but now has a 12/31 target date for its conclusion.

Media Business Report

Media honchos ponder video piracy
On Friday, top media executives attending an annual Sun Valley retreat sponsored by the Allen & Co. investment firm discussed the issue of piracy and file-swapping that have harmed the music industry. They included incoming Disney CEO Bob Iger, News Corp. Chairman Rupert Murdoch, Time Warner CEO Dick Parsons and Viacom co-president Les Moonves. Emboldened by a recent Supreme Court decision against Grokster, the group considered legal, easy ways to deliver movies over the Internet and wireless devices that could not only avert piracy and make extra money for the studios. Several guests at the conference said figuring out creative and profitable ways to get media delivered over the Internet was a top priority for media and entertainment companies. "Our challenge is to come up with hassle-free and reasonable-cost technologies for the consumer," The AP quoted Dan Glickman, CEO of the Motion Picture Association of America as saying. "You're beginning to see a lot of relationship-building between the cable, telecom and content industries" on forging deals to deliver media online. I think the opportunities will explode over the next four to five years." Glickman also said the recent case against Grokster, in which the association was heavily involved, should encourage new technologies, not stymie them, as some technology executives have warned, by making it easier and more practical to make legal offerings of movies. Intel presented its vision of a high-speed entertainment network for the home, and actor Morgan Freeman announced that Intel had agreed to invest in a new company he was starting that would allow consumers at home to view first-run movies delivered over the Internet, according to an AP report.

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Media Markets & MoneyTM

Dateline Indianapolis: Davidson strikes again
Fast-growing Davidson Media Group has found a portal into yet another decent market. This time it's getting a heritage AM station. Despite the fact that it's in Indianapolis, and the selling entity bears the name Smulyan, it is not - - repeat not - - an Emmis property. WNTS-AM 1590 is the station, which is being sold by Natalie Smulyan and the estate of Sam Smulyan. According to broker John Pierce, the price is 2M cash. Pierce said the station was once a prominent News-Talker, as depicted by the calls N(ews)-T(alk)-S(ports), and was a training ground for the likes of David Letterman and Emmis execs Jeff Smulyan and Rick Cummings. It is now broadcasting Religious programming, as it has been going back to 1976. Closing will give Davidson its 17th market and 30th station.

Three for the road
The conference call schedule keeps on adding entries of interest to broadcasters. The latest include TV/newspaper company Belo Corp., which will sit with analysts and reporters on Friday 7/22/05 at 12:00 Noon eastern. Another multimedia player, Meredith Corp., which owns and operates television stations and consumer magazines, is in the books for Wednesday, 7/27/05 at 9:30AM eastern. Finally, radio pure play Cumulus Media will convene its session Thursday, 8/4/05 at 11:00 AM eastern. If anyone tells you to be there or be square, don't listen - - as per usual, RBR/TVBR will sit in so you don't have to.

Washington Beat

CPB back on the Hill today
The Senate Appropriations Committee is hearing witnesses today as it gets set to fund the operation for FY 2006. At least one senator is on record wondering why the House wants to cut DTV conversion funding precisely when both houses of Congress are trying to put the same conversion into overdrive. The witness list included embattled CPB head Kenneth Tomlinson, his new PBS President Pat Mitchell and others. Committee member Daniel Inouye (D-HI), who sits in a key chair as Ranking Member at the Commerce Committee, expressed his pleasure that the House restored a 100M cut in funding for CPB, as well as his dismay that it cut certain children's programming and cash for DTV build-outs. Echoing an RBR/TVBR observation from several weeks ago, Inouye said, "In particular, I question the wisdom of eliminating the funding to help local stations make the transition from analog to digital television, while at the same time, the Commerce Committees in both the House and Senate are considering legislation to complete the digital transition." Lumping these concerns together with a minor history lesson - - this isn't the first time the House has voted to cut CPB - - Inouye commented, "Traditionally, the Senate has restored this funding and I hope that Senators Specter and Harkin will continue to champion these important programs."

Programming

Fox News Radio signs Jim Slade
for Discovery mission
Fox News Radio has signed Jim Slade as a contributor to the network for space coverage, announced Kevin Magee, SVP. Slade will provide commentary during the launch and landing of the space shuttle Discovery on 7/13. Slade covered the US space program for forty years beginning in 1961 with Alan Shepherd's Freedom 7 flight and has extensive knowledge of aviation. In addition to being a journalist, Slade is a pilot and has worked at ABC for six years providing on location reports on aviation, space and science for World News Tonight.

Transactions

5.25M WNYQ-FM Albany-Schenectady-Troy (Malta NY) from Vox New York LLC (Bruce G. Danziger) to 6 Johnson Road Licenses Inc., a subsidiary of Pamal Broadcasting Ltd. (James J. Morrell). 525K escrow, balance in cash at closing. Superduopoly with WROW-AM, WKLI-FM, WFLY-FM, WYJB-FM & WAJZ-FM. Buyer is putting several Glens Falls NY-area stations into a trust to clear the way for this deal. [File date 6/8/05.]

200K WDTM-AM/WSIB-FM Selmer TN from WDTM Inc. (David B. Jordon Sr.) to Grace Broadcasting Services Inc. (Charles Ennis, Lacy Ennis, Ray Smith et al). Cash. LMA until closing @ 1.25K/month. [File date 6/7/05.]

Stock Talk

Bulls continue their ride
As the Dow was up for the third trading session in a row (70.58), Radio Stocks were largely up as well. XM led the pack, up 0.45; Arbitron was at the other end, losing 0.74 on the day.

Radio Stocks

**Here's how stocks fared on Monday**
Company	Symbol	Close		Change	Company	Symbol	Close		Change
Arbitron	ARB		42.76	-0.74	Jeff-Pilot	JP		50.55	-0.22
Beasley	BBGI		14.61	-0.33	Journal Comm.	JRN		16.75	-0.05
Citadel	CDL		11.75	unch	Radio One, Cl. A	ROIA		12.80	+0.06
Clear Channel	CCU		31.62	+0.34	Radio One, Cl. D	ROIAK		12.86	+0.08
Cox Radio	CXR		15.96	+0.16	Regent	RGCI		6.17	+0.17
Cumulus	CMLS		11.83	+0.03	Saga Commun.	SGA		14.90	+0.24
Disney	DIS		25.18	+0.18	Salem Comm.	SALM		20.68	+0.23
Emmis	EMMS		17.98	+0.27	Sirius Sat. Radio	SIRI		7.11	+0.13
Entercom	ETM		33.44	+0.23	Spanish Bcg.	SBSA		10.12	+0.11
Entravision	EVC		8.37	+0.28	Univision	UVN		27.97	+0.07
Fisher	FSCI		46.75	+1.44	Viacom, Cl. A	VIA		32.85	-0.35
Gaylord	GET		46.68	+0.58	Viacom, Cl. B	VIAb		32.66	-0.34
Hearst-Argyle	HTV		24.64	+0.04	Westwood One	WON		20.20	-0.03
Interep	IREP		0.43	-0.08	XM Sat. Radio	XMSR		36.08	+0.45
International Bcg.	IBCS		0.01	unch	-	-	-	-	-

Bounceback

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Arbitrends

Upped & Tapped

MediaAmerica taps Rose TenEyck
Jones MediaAmerica has named Rose TenEyck to the position of Manager, Talk Radio Sales, based in NYC. With this position, TenEyck returns to radio sales, having most recently held the position of Account Manager at NBC Universal, where she repped the Paxson O&O TV stations. Rose's prior experience also includes almost 20 years at KGO-AM San Francisco, where she sold locally as well as nationally.

Susan Groves named OM in Savannah
Triad Broadcasting VP/Market Manager Robert Leonard announced Susan Groves joins his Savannah-Hilton Head team as Operations Manager for the seven station cluster. Groves, an 18-year radio vet, makes the move from Birmingham, Alabama to take the operations post with Triad. Her new cluster includes WFXH-AM, WFXH-FM, WGZR-FM, WGCO-FM, WLOW-FM, WWVV-FM and WGZO-FM.

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.

The Local Radio
win auto disclaimers
RBR was First to report on the Missouri House Bill #487, the first state allowing broadcasters to use a #800 number or Internet site to provide the required disclosure information for automotive advertising. Missouri Broadcasters Association President/CEO Don Hicks, explains how other state broadcasters/associations could get this legislation from a grass-roots perspective. RBR observation: First this is a local victory not a national one since leaders at the association level of NAB, RAB, 4A's, TVB etc. have not been able to move anything inside the DC beltway and they probably won't just because there is too much on the plate of anyone to get anything completed. Plus, in all honesty this is a much better victory for local broadcasters and especially radio. Now the key will be to have other grass root state movements spin from Missouri and now take the mega bucks from your local newspaper. Just look at any Sunday auto section of any newspapers and count the opportunities.
07/08/05 RBR #133

Peace reigns once more
over the Magic Kingdom
The swords were put back in their scabbards at Walt Disney Co. Roy E. Disney and Stanley P. Gold "have agreed to put aside the differences that have characterized their relationship over the past several years." Winner will be Robert Iger. RBR observation: Now that the boys in the family have agreed to play nice with one another, the company can focus 100% of its energy on getting back on solid footing. The New York Times noted that Iger was already in the process of trying to mend a rift between Disney and Pixar Animation that was caused by testy relations between Eisner and Pixar's Steve Jobs. And maybe they'll finally get around to changing the status of the talked-about sale of the radio station group to something other than rumor. Iger now calls the shots and it is his media game to win or lose. But what ever it is just start doing something. 07/08/05 RBR #133

RBR First
Missouri Gov. allows 800 number, internet site for auto ad disclosures
The power of State Broadcaster Associations demonstrated: Missouri Governor Matt Blunt yesterday signed legislation (in House Bill #487) which allows broadcasters to use an #800 number or Internet site to provide the required disclosure information for automotive advertising. Missouri is the only state so far to do so. The underlying bill has an emergency clause. So, this legislation became law with an effective date of 7/7. For a complete copy of the legislation read here 07/08/05 RBR #133

RBR First
Missouri Broadcasters Association
President/CEO Don Hicks
Told first to RBR/TVBR the signed bill presents a multiplicity of factors in play: "First off, this is really a consumer-friendly piece of legislation because the consumers were being ill-served by the previous regulations, which basically there was no way that anyone could comprehend or understand, or any way the complete disclosures could have been made in the copy of an ad in an understandable way.
07/08/05 RBR #133

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