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Volume 22, Issue 138, Jim Carnegie, Editor & Publisher

Friday Morning July 15th, 2005

Radio News®

FCC can't agree on how
to even discuss new rules
The kickoff of the revisitation of media ownership rules was yanked from today's FCC Open Meeting schedule. What was supposed to be a noncontroversial enumeration of issues remaining from the 6/2/03 rulemaking after court and congressional intervention bogged down in controversy over how much time to allow for public comments, how many public meeting to hold and how much money to spend on independent studies.

RBR observation: In the first go-around, former FCC Chairman Michael Powell made it to two public forums on the rules, one of which was set up by the FCC itself. That was deemed insufficient by the two Democrats, Michael Copps and Jonathan Adelstein, who embarked on numerous public forums. Powell pointedly refused to provide any extra funding over and above their standard travel allowances. The current controversy is almost certainly along similar lines - - the Republicans would like to do this as quietly as possible, or at the very least find little use for the public hearings (which have tended to be repetitive and one-sided, as people without an axe to grind don't bother to show up). The Democrats want the process to be as noisy as possible. All we know for sure is that this isn't going to be over any time soon.

Please sir, I want some MORA
Apparently it's not just nature that abhors a vacuum - - we may be able to add Rep. Maurice Hinchey (D-NY) to the vacuum-abhorring list. It may or may not be a coincidence, but just after the FCC failed to act, he and Rep. Diane Watson (D-CA) hit the wires with the Media Ownership Reform Act (MORA), their own set of media ownership rules - - a proposed legislative package which would take at least one of the rules back to its pre-Telecom 1996 state. Here are the details: "It restores the Fairness Doctrine, reinstates a national cap on ownership of radio stations, and lowers the number of radio stations one company can own in a local market. It further reinstates the 25 percent national television ownership cap, requires regular public interest reports from broadcasters and provides for more independently produced programming on television. The bill establishes new public interest obligations to ensure broadcasters are meeting the needs of local communities and requires increased and sustained public input and outreach so that Americans have a voice in the programming they receive."

RBR observation: The big difference between this and the FCC ownership proceeding is that eventually the FCC proceeding will go somewhere. There is about as much chance of a July snowball fight breaking out on Capitol Hill as there is for this bill to go anywhere.

Closed encounter at the FCC
By a unanimous 4-0 vote, the FCC put regulations mandating closed captioning on virtually all video programming which was put in motion on a gradual basis by enactment of Telecom 1996. The requirement will be in effect on 1/1/06. At the same time, the Commission called for commentary on a number of possible revisions and additions to the closed captioning rulebook. The questions are in regard to both the cost and practicality of adhering to the rules, as well as the framework for enforcing them.
| Here's a list of the CC questions |

They can't be serious about Sirius/ABC
We thought we made a strong case that there wasn't even much excuse for any smoke, much less fire, when it came to rumors about a Sirius Satellite Radio/ABC Radio betrothal. But the rumors just don't want to go away. This despite the fact, as we pointed out, that Sirius would have to wheedle ABC into accepting essentially a no-money-down deal, and despite the newer rumor out of the Wall Street Journal that ABC may be looking into a "reverse Morris Trust" structure for any sale, which would require an existing radio group roughly equal in value to the combined ABC radio stations and networks. Reuters reports essentially that a friend of a friend in the analyst community have it on good authority that Sirius has no interest in ABC.

RBR observation: Let's see if we got this right - - this second wave of rumors started because Sirius' Mel Karmazin was seen talking to ABC's Robert Iger in Sun Valley ID. By that standard, if President Bush's designated shepherd for a potential Supreme Court nominee, ex-Sen. Fred Thompson, is seen in the first class cabin of an airplane upon which Judge Judy happens to be a passenger, the headline may well read "Judge Judy headed for SCOTUS." C'mon. Not even Sen. Jerry Springer (D-OH) would believe that one (what, he didn't even run?). (Come to think of it, maybe Ms. Sheindlin would be a good pick - - "I'll tell you when to speak, Counselor - - what's your full name anyway, Fibber Lee Bailey?")

XM buying WCS Wireless
Is it just to get rid of another potential subscription radio service, beef up its own data and video delivery capabilities, or both? Both and maybe more-XM signed an agreement to acquire WCS Wireless, for 5.5 million shares (198 million dollars) of XM Common Stock. WCS owns terrestrial wireless spectrum licenses in areas covering 163 million people, including 15 of the top 20 US metros. Licenses that on average include 10 mHz in frequency bands adjacent to XM's radio service. XM said the deal will enable it to expand into multimedia subscription services like video and data offerings, through new frequencies and products, as well as integrating them with XM's offerings. XM will announce more details on the use of the additional spectrum in the future. XM has 12.5 mHz of frequency under its satellite radio license. The deal should close before year's end, subject to regulatory approval. Sirius also recently announced an expansion into video.

RBR observation: Video and data only? A longshot, but we wonder if this may parlay into a mobile Internet offering. The terrestrial base stations the WCS licenses would afford could potentially be converted into transmit-receive stations (rather than transmit-only), with XM subscribers someday be offered new gear to transmit Internet requests to the base stations in a cellular-return fashion. Certainly a bit far off, but with the licenses in hand, the development and regulatory approval process could begin anytime.

Conference Calls Q1 2005

Tribune banks better net despite revenue drop
Honcho Dennis FitzSimons cited advertising weakness on both the newspaper and television sides of Tribune's multimedia operation (the company also has one radio station - - a big one, full-throttle clear station WGN-AM Chicago). A loss of 40M in revenue still translated into a big gain in net income - - largely due to losses related to circulation scandals last year. On the TV side, Tribune also pointed to Nielsen's LPM as a source of trouble. FitzSimons said, "Second quarter results reflect our continued focus on cost controls in the face of a weak advertising environment in the nation's largest markets." Revenue for the TV group fell from 368M in Q2 2004 to 335M this time around, a 9% drop. The Tribune station lineup, which features a heavy dose of WB affiliates, is among the groups that say Nielsen's LPMs undercount minority viewers. On the newspaper side, the company managed a 1% gain in advertising revenue despite forced rate-slashing at Newsday, and enjoyed a 6% gain in classified revenue. This was offset, however, by a 9% loss in circulation revenue.

Adbiz©

Shona Seifert gets 18 months in ONDCP case
A federal judge sentenced Shona Seifert to 18 months in prison and ordered her to pay a 125,000 fine for her role in the Ogilvy & Mather scheme to overbill the government on its ONDCP anti-drug ad account. The judge also ordered her to develop a written code of conduct for the advertising industry. The ruling was made by Judge Richard Berman of the U.S. District Court in lower Manhattan. On Tuesday, Berman slapped Seifert's co-defendant in her February trial, Thomas Early, with 14 months in jail and a 10,000 fine. Early was the finance director of Ogilvy NY.

Hilton account headed to Y&R, OMD
Hilton Hotels has reportedly chosen Young & Rubicam to handle creative on its estimated 45 million account. Buying on the business were awarded to OMD, which covers Hilton, Hilton Family, HHonors, Hilton Garden Inn, Hampton Inn, DoubleTree, Homewood Suites and Embassy Suites. OMD also won planning for the Hilton brand and Hilton Family of Hotels. Yet to be assigned are planning on Hampton Inns, Doubletree, Homewood Suites and Embassy Suites. Foote Cone & Belding previously handled creative on the Hilton brand. FCB defended. Other contenders included McCann Erickson NY and TBWA/Chiat/Day NY. FCB retains creative duties for DoubleTree, Hampton Inn, Homewood Suites and Embassy Suites, not part of the review.

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Media Markets & MoneyTM

Second state for Freeland
Milan Broadcasting Company is exiting the radio business, and Jim W. Freeland is taking the opportunity to expand his group into a new state. According to broker Jim Henson, Freeland is getting Classic Hit Country WVHR-FM for 650K cash. The town is in unrated Huntington TN, roughly between Jackson and Kentucky, where Freeland's other stations are. They include WCBL AM & FM Benton and WCCK-FM Calvert City.

More dogs, more ponies set for show
Another broadcast duo, one specializing in radio and the other in television, have set the date and time of their conference calls to discuss Q2 2005 results. Today's crop starts with Beasley Broadcast Group - - it'll sit with analysts and other interested parties Thursday, 7/28/05 at 10:00AM eastern. Sinclair Broadcast Group is the other. It's scheduled for Wednesday, 8/3/05 at 8:45 AM eastern.

Washington Beat

Controversy good for the warchest
Embattled House Majority Leader Tom Delay (R-TX) and his propective 2006 challenger, former Rep. Nick Lampson, who was displaced by Delay's rejiggering of Texas congressional districts back in 2004, each have interesting quarterly reports of their own. Delay's is keyed to the number 800K; Lampson's to 500K - - that's how much campaign cash each raised over the past three months. According to the Associated Press, there are both on a pace to build a 5M warchest by the time the campaign really gets rolling. Delay's prominent position in the House and his perceived vulnerability have thrown a national spotlight on this race, which should attract far more national cash than is generally the case for a House race.

Transactions

8M KADD-FM Las Vegas (Laughlin NV) from M&&M Broadcsating LLC (Rick L. Murphy) to Western Broadcasting LS LLC, a subsidiary of Simmons Media Group LLC (David E. Simmons et al). 550K earnest money, balance in cash at closing. Eventual duopoly with KZHK-FM St George UT. KADD is moving to Logandale NV and KZHK is moving to Bunkerville NV. [File date 6/10/05.]

6.5M KLRZ-FM New Orleans (Larose LA) from Coastal Broadcasting of Larose Inc. (Jerry J. Gisclair) to Citadel Broadcasting Compay (Farid Suleman). Citadel is assuming what was a 7/3/01 2.25M acquisition contract with buyer Coastal Radio Assets LLC (Michael Oesterle). 4,461,365.76 of with is going to Oesterle's company, and 1,938,634.24 going to Gisclair's company. Superduopoly with KKND-FM, KMEZ-FM, WDVW-FM & WKSY-FM. Citadel is spinning off WOPR-FM & WPRF-FM. [File date 6/10/05.]

605,635 WANR-AM Youngstown-Warren (Warren OH) and WGRP-AM/WEXC-FM Greenville PA. 63% of Beacon Broadcasting Inc. from Michael Arch (63% to 0%) to Harold F. Glunt (37% to 100%). 5K cash, balance in debt assumption. [File date 6/10/05.]

Stock Talk

Oil down, inflation flat, stocks up
Broadcast issues are continuing a pattern of going their own way, regardless of what the general stock market is doing. At least yesterday there were mixed results, instead of everyone heading down while the market was up. Disney surged, but apparently some don't like the idea of SBS getting into TV - - it dropped 87 cents a share.

Radio Stocks

**Here's how stocks fared on Thursday**
Company	Symbol	Close		Change	Company	Symbol	Close		Change
Arbitron	ARB		42.66	+0.07	Jeff-Pilot	JP		50.70	+0.02
Beasley	BBGI		14.43	-0.02	Journal Comm.	JRN		16.61	+0.06
Citadel	CDL		11.46	-0.09	Radio One, Cl. A	ROIA		12.67	-0.05
Clear Channel	CCU		32.24	+0.30	Radio One, Cl. D	ROIAK		12.65	-0.11
Cox Radio	CXR		15.89	-0.10	Regent	RGCI		5.90	-0.11
Cumulus	CMLS		12.07	-0.12	Saga Commun.	SGA		13.89	-0.30
Disney	DIS		26.33	+0.62	Salem Comm.	SALM		20.31	-0.30
Emmis	EMMS		17.99	+0.02	Sirius Sat. Radio	SIRI		6.73	-0.18
Entercom	ETM		32.19	-0.41	Spanish Bcg.	SBSA		9.00	-0.87
Entravision	EVC		8.30	-0.07	Univision	UVN		27.28	-0.22
Fisher	FSCI		45.55	-0.84	Viacom, Cl. A	VIA		33.02	+0.07
Gaylord	GET		47.53	+0.27	Viacom, Cl. B	VIAb		32.75	-0.04
Hearst-Argyle	HTV		24.58	+0.08	Westwood One	WON		20.02	-0.01
Interep	IREP		0.47	+0.03	XM Sat. Radio	XMSR		35.87	+0.25
International Bcg.	IBCS		0.01	unch	-	-	-	-	-

Bounceback

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June Digital Magazine
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EDI - Electronic Data Interchange, sometimes synonymous with Electronic Invoicing
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RBR Radar 2005

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

SBS breaks into television
Raul Alarcon's Spanish Broadcasting System has long been one of the leading exponents of Hispanic radio. Now it's expanding in its home market of Miami, adding one of those post-radio broadcast outlets that include pictures with the transmission. WDLP-TV Channel 22. The station in a Spanish language indy licensed to Key West, the extreme southern extremity of the Miami-Ft. Lauderdale DMA. The station's cable and satellite presence helps get it before the eyes of Miami viewers - - 1.5M of them. RBR observation: Look for SBS to exploit any and all cross-promotional and cross-platform opportunities presented by the soon-to-be-expanded cluster. Once again we remind all that SBS has one of the finest programming executives in the business - Vice-President Director of Programming Bill Tanner. All in the media do not let your guard down if Tanner comes to town but watch his skills at work. 07/14/05 RBR #137

Goldman Sachs sets up
NAB conflict Conference
The 14th Annual Goldman Sachs Communacopia Conference is set for 9/21-22/05. Conflict: The NAB Radio Show in Philadelphia in scheduled for 9/21-23/05. Which one are you going to attend? Communacopia Conference brings out "Preliminary List of Confirmed Companies" is indeed impressive, with the broadcasting, cable and satellite businesses represented by the likes of Cablevision Systems, Clear Channel, Comcast, DirecTV, Gannett, McGraw-Hill, NBC Universal, News Corp., Sirius, Time Warner, Univision, Viacom, Walt Disney and XM.
RBR observation: First no disrespect but how many more of these financial conferences is really needed since the participants have said the same thing over and over again all year. Just pick your financial or other conferences that have already been held. Secondly, these CEO of public companies are not going to tell you anything - they can't. We have been there and they are nice especially the food. So your best bet if you are radio and preparing to compete in 2006 - decision is easy - NAB Philly is it. Besides you can get a great cheese steak. 07/14/05 RBR #137

Rocket fuel to Disney radio rumors
Perhaps you read this in the RBR/TVBR story "Peace reigns once more over the Magic Kingdom." "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." Now Wall Street Journal has put out a possible sell-off deal structure for ABC radio interests, and fingered possible buyers. RBR observation: Get real, Bob Iger is just finding his way to the CEO john. And why toss off 700m when the machine ain't broke. It is a strong marketing asset once someone at ABC/Disney figures it out. Take a lesson from what CBS honcho Les Moonves once said; "Come fall I use all 183 radio stations to my marketing advantange." When Moonves made that statement was actually wishing he had 1,183 radio stations. 07/13/05 RBR #136

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