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Volume 24, Issue 144, Jim Carnegie, Editor & Publisher
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Wednesday Morning July 25th, 2007
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Radio News ®
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 NYC winners and losers
Arbitron's Spring ratings in New York are good news for CBS and Univision. Bear Stearns analyst Victor Miller calculates that 12+ ratings for the CBS cluster improved 13%, led by AC "Fresh" WWFS-FM (the old WNEW). CBS has reformatted three stations in NYC thus far this year, although the switch of WCBS-FM from "Jack" back to Oldies came after the latest book. The other change was switching "Free FM" WFNY-FM back to "K-Rock" WXRK, boosting its share to a 1.7 from 1.2 a year earlier. The entire CBS cluster claimed a 15.4 share in Spring 2007, up from 13.6 a year earlier. Miller theorizes that Clear Channel's market leader WLTW-FM was hit hardest by the WWFS launch and Clear Channel's cluster ratings fell by 10%. There was more bad news for Emmis, where ratings fell 11%, with all three stations in its cluster down. Univision's cluster ratings jumped 37%, with WQBU-FM up 300% with its Regional Mexican format from the former WZAA's Tropical format. Miller says the WQBU gains appeared to come at the expense of SBS, whose NYC cluster saw a 10% decrease in share. The Spring books for Los Angeles and Chicago are due out today.
 Public interest reports
on the horizon?
The broadcast community received a little bit of attention in yesterday's Subcommittee on Telecommunications and the Internet session with the five FCC commissioners. The DTV transition was mentioned several times and other topics also came up. But the lion's share of attention went to the auction of spectrum that broadcasters are leaving. There was one look-out moment, however, an exchange between Anna Eshoo (D-CA) pictured,, FCC Chairman Kevin Martin (R) and Commissioner Michael Copps (D) over public interest and license renewals. Eshoo said that the license renewal process provides a "golden moment" to assure that broadcasters are fulfilling their public interest obligations. Martin noted that the public's interest in this topic is on the rise and said he has a pending FCC item which would give broadcasters a collection of categories to report on in order to provide a public interest record to evaluate. Copps agreed, but went further, saying that there is "precious little" out there to give broadcasters a sense of what's expected of them. He would spell out just what the FCC expects, and Eshoo agreed that yardsticks are what are needed. Eshoo telegraphed her support for the Copps wing of the FCC at the outset of the meeting, reading an one of his many editorials on the topic into the record and recommending it be added to each subcommittee member's reading list. Subcommittee Chairman Ed Markey briefly grilled Deborah Taylor Tate (R) on childhood obesity/advertising guidelines. She said she is optimistic that media outlets will join food manufacturers in supporting voluntary restrictions on preteen advertising but will wait for a task force release due in September before considering possible FCC remedies. Ranking Member Fred Upton (R-MI) inquired about the progress of the Tribune proceeding, which needs cross-ownership waivers, and was told it is on track for a 4th quarter decision. Mike Doyle (D-PA) spoke on behalf of himself and Lee Terry (R-NE) in urging a big push to get more LPFMs on the air.
RBR observation: Public interest reporting requirements. Wow. Right now if a station is on air as licensed and has any kind of audience at all it is considered to be serving the public interest. The reason to take this seriously is this: Any time Martin and Copps agree on a topic, it is close to a mortal lock to get anywhere from three to five votes on the FCC's 8th Floor. This could get interesting real fast.
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No quick decision from the Bancrofts
Not that anyone expected one. Reports of the family meeting on Monday indicate that the Bancrofts are deeply divided over whether or not to sell Dow Jones & Co. to Rupert Murdoch and News Corporation for five billion bucks - a large chunk of which would go to members of the family that has controlled the company for 100 years. As expected, the four family representatives on the Dow Jones board were split. Christopher Bancroft and cousin Leslie Hill reportedly spoke out against a sale. Another cousin, Elizabeth Steele, and Michael Elefante, a lawyer for some of the family trusts, each spoke in favor. Despite the split opinions, the New York Times quoted Christopher Bancroft as saying that the meeting was "not acrimonious at all." The Wall Street Journal, which is owned by Dow Jones, reported that new opposition came from Jane MacElree, who had been seen as a swing vote, although some of her children are in the pro-sale camp. The WSJ says only one of the three main branches of the family appears to solidly support a sale. That branch, the Cooks, however, is the largest, with 23% of the voting power at Dow Jones. In all, the various Bancroft heirs hold 64% of the company's voting power.
RBR observation: What happens next? Over the next few days the various Bancrofts will tell the family lawyers where they stand on the sale and the lawyers will tally up the yeas and nays. It seems unlikely that the entire family will agree to pledge the entire 64% stake in support of the deal, as Murdoch has requested. Then it comes down to counting the votes. If it appears that enough Bancrofts support the sale that they and a majority of the non-Bancroft votes would be enough to carry the day, the directors will likely call a special shareholders meeting to vote on the sale. Then it comes down to News Corporation beating the bushes for every possible vote to ensure approval. It could be a close vote.
 Americans open to
independent candidate
Many citizens profess an antipathy toward politicians - all politicians - and express this sentiment by refusing to align themselves with either the Republicans or the Democrats. Not only would this group of disaffected consider supporting an independent candidate for president, a new Harris Poll says that many party affiliates would as well, combining for a total of two thirds of the electorate. 88% of self-described independents would give consideration to a third-party or independent candidate, as would 56% of self-described Republicans and 59% of self-described Democrats. Harris notes that older voters are less likely to support an independent. The percentage of "Matures" (aged 62 or older) is 59%, it increases to 64% for Baby Boomers" (aged 43-61), 69% for "Gen Xers" (aged 31-42) and 74% for "Echo Boomers" (aged 18-30). This is not, however, particularly good news for New York City Mayor Michael Bloomberg, who exited the Democratic party to run for mayor and recently exited the Republican party, fueling speculation about his potential to run for the White House as an independent. Harris finds that at this point, only 22% say they'd vote for him, while 67% specifically would not vote for him.
RBR observation: The speculation is that Bloomberg will spend his own money for the campaign, like Ross Perot before him, and the numbers being batted around run from 500M to 1B. A large percentage of that would go into broadcast advertising. Will he run or not? We certainly can't answer that question, but we do know that there are somewhere between 500M and 1B reasons for broadcasters to maintain a Bloomberg watch.
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Engineer Field Trip. No Travel.
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| Wall Street Media Business Report TM |
Scripps challenged by its own success
While old media companies, especially those with newspapers, have been out of favor with investors, Scripps has been a Wall Street darling in recent years because of its fast-growing Scripps Networks division, with its targeted lifestyle networks and related websites. But Scripps CEO Ken Lowe told analysts yesterday it is becoming difficult for Scripps Networks to maintain its double digit growth as the cable networks reach the point of having a billion bucks in annual revenues. He says the cable nets will still deliver double digit growth for 2007, but the company's Q3 guidance was below Street expectations and Scripps stock took a hit yesterday. Needless to say, Scripps newspapers are being hit by the same advertising softness as other print groups and its TV group has tough comps against last year's political advertising. Q2 ad revenues for Scripps Networks rose 4.8% to 245 million, while affiliate fees rose 19% to 58.7 million. Newspaper ad revenues were down 11% to 131 million and total print revenues fell 8.9% to 166 million. TV revenues declined to 84.5 million from 86.4 million, with local up 0.3% to 54.2 million and national down 4% to 25.8 million. Political revenues were 400K, vs. 2.7 million a year ago. Scripps expects revenues for the cable networks to be up 8-10% in Q3, TV to be down 13-16% and newspaper revenues to be down 5-8%.
LBI sells bonds
LBI Media, the parent of Liberman Broadcast, sold 228.8 million of 8.5% senior subordinated notes due 2017. The issue was recently rated B2 by Moody's Investors Service (7/9/07 RBR #132).
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Ad Business Report TM
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 AOL targets behavior
Time Warner's AOL announced a deal to acquire Tacoda, an online behavioral targeting advertising network. AOL says the acquisition will enable it to extend its targeting capabilities to advertisers and publishers. Tacoda's technology enables advertisers to serve highly relevant ads based on consumers' online behaviors. "The acquisition of Tacoda will build on our advertising momentum, letting us better serve advertisers by enhancing our ability to precisely target advertisements across an even broader network," said Ron Grant, AOL President and COO. AOL noted that According to eMarketer (June 2007), the behavioral targeting market is set to increase to 3.8 billion bucks by 2011, from 350 million in 2006.
Unfettered ad campaign on public Pittsburgh air
When is a noncommercial broadcaster able to just go nuts and run advertisements to its heart content? WQED in Pittsburgh is demonstrating. And the answer is when it is advertising itself. The company has a full cross-ownership noncommercial empire which includes television, radio, magazine and on-line elements. The entire platform is undergoing a makeover, complete with new logos and theme music, and it is putting its entire platform to use to introduce its new look to the citizens of Pittsburgh. The campaign has no less than 15 distinct television spots with complementary radio elements, as well as a pair of special three-minute HD radio features and print advertising.
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| Media Business Report TM |
Harry Reid's insomnia fuels the news
An interim report on Iraq propelled to policy debate to the head of the newshole last week. This time, Senate Majority Leader Harry Reid (R-NV) pulled an all-nighter with 99 of his closest friends on the same topic, propelling it once again to the top of the Project for Excellence in Journalism coverage chart for the week of 7/15-20/07. Terror and Middle East topics maintained their usual stranglehold on the chart, but journalists found time to pay attention to three one-time events, including a plane crash in Brazil, a steam explosion in New York and an earthquake in Japan. Radio talkers have a particular interest in the Fairness Doctrine, which made its lone appearance on that medium's list.
| Top ten lists here |
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| Media Markets & Money TM |
Apex engineers a deal on the SC coast
Engineering is precisely the word for this triple play. Apex Broadcasting, headed by Dean Pearce, is going to move WAVF-FM Hanahan SC to Forestbrook SC taking it out of the Charleston SC market and into the Myrtle Beach SC market. It's a swap for Next Media Group's WKZQ-FM Myrtle Beach. NextMedia, headed by Steve Dinetz, will in turn move WKZQ to Hanahan. A third party, Miller Communications, will take WWBD-FM Bamberg SC and move it to Isle of Palms SC. Apex is the driver, paying 1.75M to NextMedia and funding all three CPs. It will wind up with a one-AM, three-FM cluster in Charleston, while NextMedia remains with a one-AM, four-FM cluster in Myrtle Beach.
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| Washington Media Business Report TM |
 Reporters attack former employer's license
Fox O&O WTVT Tampa FL has survived a license challenge brought by two of its former employees, reporters Jane Akre and Steve Wilson, who accused the station of distorting the news. The petition was filed 4/25/05 following a lawsuit on the same charges filed 4/2/98 under Florida whistle-blower statutes. The reporters claim their story on synthetic bovine growth hormone (BGH) was scuttled due to concerns it may have offended Monsanto, the maker of the BGH, and that a subsequent story on the topic contained falsehoods. The station vigorously defended its journalistic decisions. And the FCC noted that many of the facts surrounding BGH are a matter of opinion, and in fact the issue remains controversial to this day. In any case, the Commission said that it has "neither the expertise nor the desire to look over the shoulder of broadcast journalists and inquire why a particular piece of information was reported or not reported." Although the FCC admonished the station for a minor public file infraction, its license was renewed.
RBR observation: The FCC simply is not a useful tool for disputing the program content of a broadcast station, and that is as it should be. We would be worried if the FCC had hired a stable of expert animal husbandry consultants and tried to get to the bottom of this nine year old case.
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| Ratings & Research |
Cumulus signs for PPM in Houston
Previous holdout Cumulus Media is the latest company to sign for Arbitron's Portable People Meter (PPM) ratings in Houston. Arbitron announced that Cumulus has now signed a 13-month contract, covering ratings data from April 1, 2007 through April 30, 2008. The contract covers only KIOL-FM and KRBE-FM, but not Cumulus' third station in Houston, KFNC, which Arbitron said "has not met the current minimum reporting standards for the PPM radio ratings reports issued to date for Houston." All three are encoding for PPM measurement.
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| Transactions |
1,500,007 WDBA-FM Du Bois PA. 100% of Du Bois Area Broadcasting Inc. from Debbie Brownlee (40% to 0%), Joyce Brownlee (40% to 0%), Daniel Brownlee (10% to 0%), Charles Brownlee (10% to 0%) to Family Life Ministries Inc. (Richard Snavely Jr. et al). Two 37.5K escrow deposits, two cash payments of 462,503.50, 500K note. [File date 6/29/07.]
500K KMRI-AM Salt Lake City UT (West Valley City UT) from KMRI Radio LLC (Pat Openshaw) to Alpha & Omega Communications LLC (Pat Openshaw, Connie Whitney, Isaac Max Jaramillo). Unspecified combination of cash, assumption of liabilities and forgiveness of debt. Cross-ownership with KTMW-TV Salt Lake City UT. [File date 6/29/07.]
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| Stock Talk |
It's a roller coaster ride!
Stocks went up Monday on good earnings news from Merck. Stocks went down Tuesday on bad earnings news from DuPont. Strap yourself in - the earnings report cycle has just begun. The Dow Industrials tumbled 226 points, or 1.6%, to end at 13,717.
Radio stocks slid as well. The Radio Index fell 3.530, or 2.3%, to 152.995. Journal fell 5.8%, Entravision 4.7%, Emmis 4.6% and Citadel 4.1%.
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| Radio Stocks |
Here's how stocks fared on Tuesday
| Company |
Symbol |
Close |
Change |
Company |
Symbol |
Close |
Change |
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Arbitron
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ARB
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50.00
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-1.80
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Google
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GOOG
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514.00
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+1.49
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Beasley
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BBGI
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8.77
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+0.09
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Hearst-Argyle
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HTV
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22.58
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-0.85
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| CBS CI. B |
CBS |
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34.33
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-0.67
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Journal Comm.
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JRN
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11.19
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-0.69
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| CBS CI. A |
CBSa |
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34.35
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-0.62
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Lincoln Natl.
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LNC
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64.52
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-1.92
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| Citadel |
CDL |
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5.90 |
-0.25 |
Radio One, Cl. A
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ROIA
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7.12
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-0.22
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Clear Channel
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CCU
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37.18
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-0.50
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Radio One, Cl. D
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ROIAK
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7.14
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-0.16
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Cox Radio
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CXR
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14.05
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-0.50
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Regent
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RGCI
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3.40
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unch
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Cumulus
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CMLS
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11.03
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-0.09
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Saga Commun.
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SGA
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9.03
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+0.03
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Debut Bcg.
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DBTB
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1.80
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unch
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Salem Comm.
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SALM
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10.49
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-0.14
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Disney
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DIS
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34.75
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-0.28
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Sirius Sat. Radio
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SIRI
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3.12
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-0.10
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Emmis
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EMMS
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8.73
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-0.42
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Spanish Bcg.
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SBSA
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3.67
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-0.16
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Entercom
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ETM
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23.96
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-0.73
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SWMX
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SMWX
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0.16
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unch
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Entravision
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EVC
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10.02
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-0.49
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Westwood One
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WON
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5.65
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-0.06
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Fisher
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FSCI
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49.29
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-0.70
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XM Sat. Radio
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XMSR
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11.90
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-0.65
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Bounceback
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 We want to
hear from you.
This is your column, so send your comments and
a photo to [email protected]
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Below the Fold
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Ad Business Report
AOL targets behavior
Has a deal to acquire Tacoda, an online behavioral targeting ad network...
Media Business Report
Harry Reid's insomnia
Fuels the news propelling it once again to the top of the talk list...
Media Markets & Money
Apex engineers a deal
On the SC coast and Engineering is precisely the word for this triple play...
Washington Media Business Report
Reporters attack former employer's
License at Fox O&O WTVT Tampa has survived a license challenge...
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Stations for Sale
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New Hampshire
AM/FM combo
First Class facilities in NH's
fastest growing area. Double
digit increases last 6 years.
Priced at 10x trailing BCF $4.99MM
Inquiries 781-848-4201 or
E-mail: [email protected]
WEB: radiostationsforsale.net
 Market your Stations For Sale
in our daily epapers.
Contact
June Barnes
[email protected]
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Radio Media Moves
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Westward ho!
Edward "Skip" Essick has been named Director of Operations for Peak Broadcasting's KMJ-AM Fresno. For the past 11 years, Essick has been the VP/Market Manager of the six Clear Channel stations in Grand Rapids, MI. Essick will succeed long time KMJ Program Director John Broeske who had previously announced his retirement from broadcasting.
 Panero hits the exit
XM Satellite Radio CEO Hugh Panero had already been slated to lose his job if the merger with Sirius goes through and Mel Karmazin gets to head the merged company. Now, though, Panero is leaving XM in August without waiting to see if the merger goes through. Nate Davis, currently XM President & COO will serve as President and interim CEO.
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More News Headlines
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Need a ticket? Just text
Emmis' WQHT-FM "Hot 97 FM" NYC is laying claim to being the first radio station in America to offer their listeners the chance to purchase event tickets entirely via cell phone text messaging. The station has debuted this technology by allowing listeners to text to purchase tickets to Hot 97's "Funkmaster Flex & Mr. Cee Midnight Birthday Cruise," which will be held on August 10th. "Hot 97 listeners are a highly tech-savvy, mobile generation. We always look for ways to match our listeners' lifestyle with fun and exciting events and we are excited to be the first radio station in America to use mobile technology to offer our listeners the convenience of purchasing tickets entirely through their cell phones' text messaging capabilities," said Alex Cameron, Director of Sales for Emmis New York.
Cumulus correction
Our RBR observation yesterday referred to Cumulus CEO Lew Dickey and his brothers being raised in the radio business by their "late" father. In fact, Lew Dickey Sr. is still very much alive, and is now 80.
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RBR Radar 2007
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Radio News you won't read any where else. RBR--First, Accurate, and Independently Owned.
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Cumulus Media agrees to buyout
Shareholders stand to get a 40.4% premium over Friday's closing price in the 1.3 billion bucks buyout announced before the market opened yesterday, with Cumulus Media CEO Lew Dickey, his family and Merrill Lynch Global Private Equity teaming up to take the radio company private. Mean while back at the ranch, Who else will go private? Calling this the "Year of the buyout," Bear Stearns analyst Victor Miller sees Radio One and Cox Radio as likely candidates to join Clear Channel and Cumulus Media. Jonathan Jacoby at Bank of America is quite different. Among the companies he covers, he sees only Emmis as likely to go private, with Cox Radio unlikely to do so.
RBR observation: Lew and his brothers are radio guys through and through. Their father was a station owner and his sons all grew up in the business. They clearly believe in the business and have convinced their new private equity backers that there is money to be made in radio. The stakes will be high, since a company that already has pretty high leverage is being re-leveraged with a structure to boost returns for new private equity investors. Cumulus shareholders will be paid a total of 508 million for their stock, although that includes the Dickey family stake that will be rolled back into the deal, with the rest of the 1.3 billion price tag in debt assumption.
RBR note: Shareholders do not believe in radio but the equity guys do. Bottom line: After years of getting beaten down RBR has suggested for the past 2 years, GO PRIVATE and guess RBR words are now coming true. A pure Radio play today is not meant to be in the public arena.
07/24/07 RBR #143
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