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Volume 24, Issue 141, Jim Carnegie, Editor & Publisher

Friday Morning July 20th, 2007

Radio News ®

Arbitron charts growth course
With Portable People Meter (PPM) contracts in hand from his largest customers, Clear Channel and CBS Radio, as well as several other major radio groups, Arbitron CEO Steve Morris, pictured, is ready to grow the company. In his quarterly conference call with analysts, Morris indicated that Arbitron is on the prowl for acquisitions. Not just the smaller tuck-in acquisitions that it has made since its separation from Ceridian, but bigger buys - acquisitions that would expand Arbitron beyond audience measurement, but still within the general field of research. What does he have up his sleeve? Stay tuned. Morris can move in this direction now because Arbitron has a clear path for growth in revenue and profits from its main business, radio ratings. 2007 is being positioned as a "trough year" for earnings because of the cost of the PPM rollout, as well as costs associated with Project Apollo, the national research project to link PPM data across multiple media to consumer buying patterns. Arbitron's advertiser and agency partners in Apollo will soon be deciding whether to commit big bucks to carry forward beyond the experimental phase. As for PPM, the revenues are going to come in on a predictable basis as the roll-out to the top 50 markets continues. With more clarity about the path ahead, Arbitron officials yesterday confirmed their previous guidance that revenues will be up 5.5-7.5% for all of 2007, which would be 347.4-353.9 million bucks. They also tightened the earnings per share projection for this year, from the previous 1.30-1.50 per share to a range of 1.35-1.45.

Split in the Redstone family
Both Fortune magazine and the Wall Street Journal are reporting a major falling out between Sumner Redstone and his daughter and heir apparent, Shari. The reports say she is expected to quit the board of Viacom and perhaps CBS Corporation as well. It was just the beginning of this year that Sumner reached a settlement to buy his son, Brent, out of the family business empire (2/5/07 RBR #24). Despite a statement from a spokesperson for Shari Redstone denying that she has any intention of leaving the Viacom or CBS boards, the WSJ insists that negotiations are underway on a settlement to separate Shari Redstone from the family media empire. One option is reported to be having her acquire the privately held theater chain, National Amusements, which launched the family fortune. She runs the operation and has reportedly been at odds with her father on its future direction.

RBR observation: If Sumner is on the outs with both of his children, who will be waiting in the wings when the 84-year-old is no longer able to run the empire himself? His 45-year-old second wife has not, at least until now, had any involvement in the business. How are his relations with his grandchildren? Any media-moguls-in-training there?

Indecency vote gets
unanimous thumbs up
Jay Rockefeller (D-WV) received a swift up-or-down vote on S. 1780 yesterday afternoon in the Senate Commerce Committee. It's very narrow thrust is to restore to the FCC the right to fine broadcast stations for airing fleeting expletives, a right struck down recently in the Second Circuit. To say that the measure sailed through the committee would be a grotesque understatement. An entire slate of business which included several nominations and six legislative items was read out of committee for full Senate consideration with barely any comment of any kind, and there was no comment whatsoever on the "Protecting Children from Indecent Programming Act." The entire agenda was dispensed with in less than two minutes. While no senator spoke up, FCC Chairman Kevin Martin was quick to comment, "I appreciate the actions by the Senate Committee on Science, Commerce and Transportation, which affirmed the Commission's ability to protect our children from indecent language and images on television and radio. Significantly, members of Congress stated once again what we on the Commission and every parent already knows; even a single word or image can indeed be indecent." According to one constitutional scholar, if it also sails through the full Senate, the House and the Oval Office, we can look for it to sail right back to court. Harvard's Laurence Tribe, who testified on the matter before the committee last month and who is on retainer to the National Association of Broadcasters, told the Los Angeles Times, "If this is enacted, it certainly guarantees further litigation. It is essentially a directive to the FCC to proceed as if the Second Circuit hadn't spoken."

RBR observation: You'd think a speech-chilling assault on the First Amendment would be worth at least a sentence or two. You'd think that at least one legislator would rise in opposition to increasing the FCC's role as national nanny. You'd think at least one senator would object to wasting more of the taxpayer's money on costly litigation over minor slips of the tongue. You'd even think that at least one cautious legislator would consider that continued litigation over this fringe indecency issue may well eventually lead to the toppling of the entire body of indecency regulation. But no, it was waved on through with no more thought than a flagman waving a car past roadwork. Unbelievable. Go get 'em, Mr. Tribe.

NAB maintains full court press of DARS merger
The National Association of Broadcasters has taken note of admissions of wrong-doing from XM Radio Inc. and Sirius Satellite Radio Inc., and wants more information. To that end, NAB has filed with the FCC to see the details under a Freedom of Information Act. NAB says that the FCC's Enforcement Bureau is investigating "a history of serious violations of the Commission's Part 15 rules by XM and Sirius relating to their use of FM modulators/transmitters, as well as a history of widespread violations by XM of Commission rules and authorizations regarding its terrestrial repeater network." NAB says that Sirius's intention to violate these rules is a matter of record. Thus far, provision of the documents requested has been delayed by review requests. NAB's Dennis Wharton said, "XM and Sirius may operate above the Earth, but they are not above the law. Their continued reluctance to fully disclose key facts related to past violations is yet another example of why these two companies should not be trusted with monopoly power."

Food manufacturers
get qualified praise
FCC Commissioner Deborah Taylor Tate (R), pictured, was pleased with the new roster of food companies who have agreed to participate in a program to restrict advertising to preteens. So was Ed Markey (D-MA), although he is waiting to see the promises translate into action. Tate, who has carved out a niche as perhaps the primary spokesperson for children on the FCC's 8th Floor, said, "Congratulations to the eleven members of the Children's Food and Beverage Advertising Initiative for the pledges they have made today. This is an admirable step in the right direction. Hopefully, others, including members of the Task Force on Media and Childhood Obesity, will follow their example and take even further measures to positively impact childhood obesity." Markey also had kind words for the manufacturers, but tempered his praise by saying, "However, the big unanswered question at this point is how stringent each company's nutritional guidelines are. I plan to reserve judgment until these guidelines can be carefully reviewed. My hope is that they meet or exceed those developed by Kellogg last month." And that's not all. He questioned the role of the media in all this. "Most importantly, I would like the media industries to come forward with their own set of voluntary commitments." He had kind words for Disney and the Sesame Workshop, "But the rest of the television industry has got to take similar action. For instance, we haven't heard anything from Nickelodeon or the Cartoon Network, and they have a responsibility to join other socially responsible corporations in taking steps to protect children...Food marketers setting standards is half the battle, but unless the media companies also set standards, junk food ads will keep popping up to pollute the oasis."

RBR observation: It would appear that the manufacturer's action may have at the very least allowed the brakes to be applied on the anti-junk food steam roller that has been gaining momentum in Washington all year long. But Markey has shown incredible watch-doggedness in his role as chair of the Subcommittee on Telecommunications and the Internet, and if he isn't satisfied it is a foregone conclusion that this issue will come up again.

Wall Street Media Business Report TM

Arbitron by the numbers
Arbitron reported that Q2 revenues were up 6.6% to 79 million, right on target with the Thomson/First Call analysts' consensus. With outlays for the rollout of PPM in multiple markets, costs and expenses rose 17.1% to 78.8 million. That drove operating income down 95.8% to 288K. EBITDA declined 43.1% to 8.1 million.

Ad Business Report TM

Investing in smart marketing
by Ilia I. Leon

¡El tiempo! It seems like just the other day that Hispanic marketing stalled in this country by the mere preconceived notion that it was a myth. For the marketing/media pioneers that invested sleepless nights crunching numbers, cranking out consumer research initiatives and passionately conceptualizing what we knew was already becoming the Latino explosion, all I have to say is "truth conquers all." Oh, and let's not forget the 2000 U.S. Census that helped to confirm the Hispanic demographics' boom. ¡Adelante! Hispanic marketing and media practices are alive and poised for continued growth in this country. You only need to analyze your demographic universe estimates against media research to observe the logistics of sequential progression. In other words, you still need to crunch your numbers and produce all the other important and insightful diagnostics. The good news is we now have the likes of Hewlett Packard and its competitors to help facilitate this process, providing us more time to clearly communicate and practice our craft.
| Read More... |

CBS Radio to sponsor Electronic Living Expo
Living Expositions Inc. announced that CBS Radio has signed on as a premier media sponsor for the Electronic Living Expo (ELX) Boston, to be held Feb. 15-17, 2008. More than 30,000 consumers are expected to attend the event, a first-ever exposition that addresses the growing interest and rapid pace of technology innovations in consumer electronics. CBS Radio encompasses five of the most powerful radio stations in the Boston Market, including WBZ-AM, WODS-FM, WBCN-FM, WZLX-FM and WBMX-FM. And as a premier media sponsor, these affiliates will broadcast live from the ELX show floor, as well as host a variety of contests and promotional events during the exposition. Produced by Living Expositions Inc., ELX will showcase and demonstrate cutting-edge products and technologies in home entertainment, gaming, personal computing, mobile communications and more offered by leading manufacturers, retailers and services.

Media Markets & Money TM

Radio One, Bonneville file DC deal
Praise 104.1, the suburban Washington FM being run by Radio One, is now officially headed to the locally-based group. An LMA with Bonneville for WPRS-FM has been in operation since April. Today, the paperwork for the rent-to-buy deal between the two groups hit the FCC database. Radio One will get the former WCGG-FM for 38M cash. It will bump Radio One's cluster up to a five-station superduopoly cluster, along with WOL-AM, WYCB-AM, WKYS-FM & WMMJ-FM. Bonneville, which was represented by Star Media Group, remains active in the market with a cluster anchored by its WTOP all news franchise.

CCU executes a triple play
Nine Clear Channel stations in the Utica-Rome area of upstate New York are headed to three separate in-market players, according to brokerage firm Kalil & Co., and the three acquisitive companies have yet another deal in the works as adjunct to the Clear Channel transactions. Four AMs and five FMs will be divvied up among Galaxy Communications, Roses Communications and noncommercial Educational Media Foundation. Galaxy will also send one of its FMs to EMF. Full details were not immediately available.

Washington Media Business Report TM

FCC brushes aside whine about Wine Country
Mr. and Mrs. David Kernberger are no fans of KVON-AM in Napa CA, owned and operated by Wine Country Broadcasting Company. They charged that the station no longer carries "community/family oriented programming," it doesn't raise its power when it's supposed to in the morning, that its public file was missing its 2004 EEO report, and that "many of the programs broadcast are offensive and insulting to the listening audience." The charges constitute an informal objection to license renewal. The objection was denied and the license renewed. The FCC repeated once again its relative lack of authority to get into any station's programming decisions thanks to the First Amendment. On the power matter, even though the station admitted that it had on occasion been tardy getting up to speed per its pre-sunrise authorized power, there was no evidence to back up the charges. The EEO report should of course have been in the file, but the failure to have it there seemed to the FCC to be a de minimis oversight rather than an indication of a pattern of noncompliance not even worthy of an admonishment.

RBR observation: Again, we seem to be seeing an increase in disgruntled audience members going after station license renewals. There does not seem to be any particular pattern to it, and it certainly has not been systematically directed at famously large broadcasting companies. It may simply be a new spurt of activism spawned by the Internet, for all we know. It's something to keep in the back of your mind as you go about serving your community, and it probably would not be a bad idea to use some of your marketing time to remind the community about the good job you're doing. Don't forget to offer specifics.

Entertainment Media Business Report TM

K-Fed the DJ?
US magazine reports that would-be rap star and former Britney Spears hubby Kevin Federline is now eying a career in radio. He's said to be in talks for a DJ slot at Clear Channel's KIIS-FM Los Angeles. The celebrity mag says the talks so far have been "informal," but quotes an insider as saying that K-Fed "really wants to be on radio."

RBR observation: Back when Federline was just famous for being famous - the backup dancer who married the star, Britney - we would have dismissed the idea of him having any appeal as a radio talent. But we've come to like the guy. He has the ability to make fun of himself and roll with the punches, as shown by the Super Bowl ad he did for Nationwide Insurance, showing himself ending up in a fast food job. He certainly has Hollywood and music industry contacts which could give him some good stuff to talk about between songs on the radio.

Internet Media Business Report TM

Industry click fraud rate jumps past 15% in Q2
Click Forensics released industry pay-per-click (PPC) fraud figures for Q2 from the Click Fraud Index (ClickFraudIndex.com). The overall industry average click fraud rate was 15.8% for Q2 2007. This is an increase from 14.1% for the same quarter in 2006 and 14.8% for Q1 2007. The average click fraud rate of PPC ads appearing on search engine content networks, including Google AdSense and the Yahoo Publisher Network, was 25.6%. That's up from 21.9% for Q1 2007 and 19.2% for Q4 of 2006. Traffic from botnets doubled from Q1 to Q2 2007 and contributed significantly to the increase in click fraud rates. In Q2 2007, the greatest percentage of click fraud originating from countries outside North America came from France (5.1%), China (3.2%) and Australia (3%).

Transactions

900K KHIL-AM/KWCX-FM Willcox AZ from Lakeshore Media LLC (Bruce Buzil, Chris Devine et al) to KZLZ LLC (Ted L. Snider, Todd P. Robinson, Victor A. Michael). 400K loan credited toward purchase price, balance in cash at closing. Price may rise an additional 33% if upgrade attempt is successful. [File date 6/27/07.]

75K WFDR-AM Manchester GA from Provident Broadcasting Company Inc. (James L. Campbell) to Ploener Radio Group LLC (Paul W. Ploener). 5K escrow, balance in cash at closing. Combo with FM CP Woodbury GA. [File date 6/27/07.]

N/A KHKN-FM Little Rock AR(Benton AR); KBFP-AM/KBKO-FM, KDFO-FM/KBFP-FM, KTPI-FM & KRAB-FM Bakersfield CA (Bakersfield, Delano, Tehachapi, Greenacres CA); KCNL-FM San Jose CA (Sunnyvale CA); WSHE-AM & WBFA-FM Columbus GA (Columbus GA, Smiths AL); WCND-AM/WKRD-FM, WTFX-FM Louisville KY (Shelbyville KY, Clarkeville IN); WABI-AM/WWBX-FM, WKSQ-FM, WBFB-FM, WGUY-FM, WVOM-FM & WFZX-FM Bangor ME (Bangor, Ellsworth, Belfast, Dexter, Howland, Searsport ME); WBCT-FM/WTKG-AM/WBFX-FM/WOOD AM & FM, WMAX-FM & WSNX-FM Grand Rapids MI (Grand Rapids, Holland, Muskegon MI); WNSL-FM/WEEZ-AM, WUSW-FM/WFOR-AM, WJKX-FM, WHER-FM & WZLD-FM Laurel-Hattiesburg MS (Laurel, Hattiesburg, Ellisville, Heidelberg, Petal MS); WNNJ AM & FM/WSUS-FM & WHCY-FM Sussex NJ (Newton, Blairstown NJ); WWDG-FM Syracuse NY (DeRuyter NY); WOUR-FM/WUTQ-AM, WRNY-AM/WUMX-FM, WADR-AM/WOKR-FM Utica-Rome NY (Utica, Rome, Remsen NY); KCJB-AM/KIZZ-FM/KMXA-FM/KRRZ-AM/KYYX-FM/KZPR-FM Minot ND; and WLWD-FM Lima OH(Columbus Grove OH) from CC Licenses LLC, a subsidiary of Clear Channel Communications Inc. (Mark Mays) to Aloha Station Trust LLC (Jeanette Tully). Stations going into trust pending sale. [File date 6/25/07.]

Stock Talk

First close above 14,000
The Blue Chips resumed their rally, with Wall Street cheering a string of strong earnings reports - Google being a notable exception. The Dow Industrials rose 82 points, or 0.6%, to close just above 14,000 for the first time ever.

Radio stocks were mixed. The Radio Index slipped 0.040, or 0.03%, to 151.491. Cumulus led the gainers, up 2.5%. Emmis and Journal were each down 1.6%.

Radio Stocks

**Here's how stocks fared on Thursday**
Company	Symbol	Close		Change	Company	Symbol	Close		Change
Arbitron	ARB		54.01	-0.42	Google	GOOG		548.59	-0.91
Beasley	BBGI		8.39	+0.10	Hearst-Argyle	HTV		23.53	+0.08
CBS CI. B	CBS		34.92	+0.09	Journal Comm.	JRN		12.70	-0.20
CBS CI. A	CBSa		34.90	+0.10	Lincoln Natl.	LNC		67.45	-0.56
Citadel	CDL		6.05	-0.09	Radio One, Cl. A	ROIA		7.01	-0.08
Clear Channel	CCU		37.79	+0.22	Radio One, Cl. D	ROIAK		7.04	-0.03
Cox Radio	CXR		13.82	-0.06	Regent	RGCI		3.38	+0.06
Cumulus	CMLS		8.77	+0.21	Saga Commun.	SGA		8.90	-0.04
Debut Bcg.	DBTB		1.81	+0.01	Salem Comm.	SALM		10.72	-0.03
Disney	DIS		34.47	-0.13	Sirius Sat. Radio	SIRI		3.19	-0.05
Emmis	EMMS		8.77	-0.14	Spanish Bcg.	SBSA		4.07	+0.01
Entercom	ETM		24.21	+0.05	SWMX	SMWX		0.18	unch
Entravision	EVC		10.95	+0.16	Westwood One	WON		5.58	-0.01
Fisher	FSCI		50.22	-0.12	XM Sat. Radio	XMSR		12.90	-0.12

Bounceback

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Below the Fold

Wall Street Media Business Report
Arbitron by the numbers
Reported that Q2 revenues were up 6.6%...

Ad Business Report
Investing in smart marketing
Seems like just the other day that Hispanic marketing stalled...

Media Markets & Money
Radio One, Bonneville file DC deal
Praise 104.1, suburban FM being run by Radio One, is now officially headed...

Washington Media Business Report
FCC brushes aside whine
About Wine Country that is the broadcaster as some charged the station no longer carries...

Stations for Sale

Hispanic Stations-Connecticut
Two full-time established AM stations serving the Hartford & Bridgeport Markets.
Contact Dick Kozacko,
Kozacko Media Services
607-733-7138,
[email protected]

MCH Enterprises, Inc.
CA Coast FM: $1.5M
NV Boomtown: $895K
www.mchentinc.com
805.680.2265 (cell)

Market your Stations For Sale
in our daily epapers.

Contact
June Barnes
[email protected]

Radio Media Moves

Sheehan to St. Louis
CBS Radio has named John Sheehan Vice President and General Manager of KEZK-FM and KYKY-FM St. Louis, effective August 1st. Sheehan returns to CBS after serving as Vice President of Union Broadcasting's two stations in Kansas City. He was previously Director of Sales for the cluster that CBS had owned in Kansas City.

Villarreal on the Border
Border Media Partners announced that Miguel Villarreal is BMP's new Vice President/Market Manager for Laredo, responsible for KBDR "Le Lay 100.5," KQUR "Jammin 94.9," KNEX "Hot 106," XGTS "Digital Musica Internacional 107.3," and KLNT "Norteño 1490 AM."

He's outta there!
Dieter von Holtzbrinck resigned from the board of Dow Jones & Co. to protest the board's endorsement of a sale to News Corporation. He had abstained from the actual vote.

SmartMedia Magazine

Coming in September
FALL NAB ISSUE
SPECIAL DISTRIBUTION:
NAB RADIO SHOW

Radio Roundtable:
Radio execs find solutions.

Media Markets and Money:
What's attractive to equity capital these days?

Ad Biz:
Gennele Niblack, Katz Political President

Sales:
Dial Global's Eileen Decker on radio ad sales

News/Talk:
Using your website to get, keep and grow your audiences

Political Advertising:
Greg Pinello, GMMB: Political dollars for radio: The need for there to be more ideological diversity in the news-talk format; Tom Edmonds, a Republican strategist with Edmonds and Associates

Legal Ease:
Gregg Skall:
"The FCC rules on political ads-Network exception issue".

HD Radio:
Monetizing Conditional Access

New Media:
Gary Arlen: YouTube, Joost and the emerging Fox-NBC website are just the start of big bandwidth video via the Internet.

Streaming:
The impact of CRB Royalty rates on webcasters and streaming ads.

For advertising
information, contact:
June Barnes
[email protected] 803-731-5951;
Jim Carnegie
[email protected] 813-909-2916 or
Carl Marcucci
[email protected] 703-492-8191.

RBR Radar 2007

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

Houston, we have the data
Arbitron released the first "currency" radio ratings from the Houston PPM service, bringing the second market into the era of electronic measurement, adding to Philadelphia. Hispanic and African-American Radio Listening Highest in Key Audience Metrics PPM data in Houston continue to show that radio delivers consistently high levels of weekly and daily cume audiences. The PPM also indicates that Hispanics and African-Americans spend more time listening to radio than other consumer segments of the Houston radio metro.

RBR observation: Details and data available in this special page report of RBR. PPM the new currency for radio and it is good. View the charts here.
07/19/07 RBR #140

A buyout for Arbitron?
That's what analyst Jim Boyle at CL King thinks may be coming. With more and more groups signing PPM contracts, Boyle thinks Arbitron could be attractive to private equity funds. "As the de facto radio research monopoly accelerates its revenue growth, revives its historic 30%-plus margins in the coming years in a seemingly reliable fashion, has no debt and mounting cash, we suspect ARB should eventually and logically attract suitors from the many well-funded private equity groups,"

RBR observation: If this thought did not cross the minds of the PE fund guys well it now has been planted for a full course dinner for thought.
07/18/07 RBR #139

Bill so FCC can fleece
a fleeting utterance
Jay Rockefeller (D-WV) is not going after violent content with S. 1780, the "Protecting Children from Indecent Programming Act." He and his co-sponsors, Ted Stevens (R-AK), Mark Pryor (D-AR) and Dan Inouye (D-HI), are merely trying to provide a legislative underpinning for the FCC to be able to drop the hammer on speakers of a fleeting expletive.

RBR observation: Here's the scoop: This means the FCC would be able to bring out its heavy artillery, the full 325K punitive fine, if it so desires, assuming that this bill makes it through both houses of Congress and gets an autograph from the president. You never can tell on Capitol Hill, but this bill has the virtue of being extremely uncomplicated, and if Rockefeller can keep it free of excess amendment baggage.
07/18/07 RBR #139

Hard finding that key person
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