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Volume 23, Issue 147, Jim Carnegie, Editor & Publisher

Monday Morning July 31st, 2006

Radio News ®

RBR First
Look for a New Media Company
to hit the Market today
RBR/TVBR sources confirm that Softwave Media Exchange (SWMX) will begin public trading today after a quick move over the weekend to complete a reverse merger with Edgemont Resources Corp., a publicly traded company that shut down its energy exploration operations in June. The publicly traded shell provided a rapid path for Softwave to take its stock to Wall Street. Edgemont has changed its name to SWMX Inc. and, effective today, the stock will trade on the OTC Bulletin Board with the symbol of SWMX.OB. In connection with the merger, SWMX sold a private placement of four million shares of new common stock at three bucks per share, giving the company 12 million in gross proceeds for expansion and funding of current operations. Just a few months back SWMX was only known as SWMX Radio(tm), serving 13 of radio's top 15 broadcast groups in the top 50 US markets, including 39 stations with a daily national audience of approximately 8.5 million+ listeners or roughly 39% of the 18+ demo according to Arbitron ratings Mon-Sun 6am-12am. But the company moved quickly into the cable business this past June by launching SWMX Television(tm), which currently delivers access to a national daily cable audience of over 25 million viewers, representing all of the major networks including ESPN, MTV, CNBC, USA Network, Discovery Channel, TBS, TNT, CNBC, and more in (6/20/06 TVBR #120). More details to be announced this morning, but RBR/TVBR understands that SWMX had been doing a road show over the past few months to line up that 12 million bucks private placement and is ready to grow.
| Who owns Softwave and How much |

RBR observation: SWMX is unique as their systems are designed by broadcasters understanding a broadcaster's need. Radio as well as TV are seeing and needing a faster means of maximizing inventory and controlling inventory with real-time delivery with value. The key to any station's success is selling out inventory and not having to auction it off, but placing positive value and collecting the cash. Remember, once unsold inventory is gone, you cannot get it back. There is more to SWMX.OB and look for more details tomorrow in RBR.

RBR note: July's RBR/TVBR Solutions magazine where Kathy Crawford, MindShare President/Local Broadcast, focused on the online buying/auction systems and told what she needs from them to make her job easier. Below in Sales & Marketing RBR has re-deployed this into a series this week. Read it follow it as it will help you in adding revenue to your bottom line and understanding technology.

Differing on Details, Bottom line weak Q2
Mark Wienkes at Goldman Sachs is the latest Wall Street analyst to send RBR his consolidated outlook for radio companies reporting Q2 results in the next couple of weeks. He thinks most of the companies will meet Wall Street expectations, although he says there is a "modest risk a few could slightly miss if revenue did not finish the quarter as planned." That puts him somewhere between the pessimistic Anthony DiClemente at Lehman Brothers and Marcia Ryvicker at Wachovia Securities, who expects no misses and even thinks Clear Channel and Entercom could beat expectations. Wienkes is expecting more weak performance in Q3, so he doesn't see anything to get him excited about the sector. "In short, secular (inventory and audience declines) and cyclical (weak ad growth) drivers are working against the radio industry, rendering pricing power anemic and revenue growth sluggish, while spending is in an up cycle, crimping margins," Wienkes said in his latest analysis. How do the forecasts stack up? RBR has put the Q2 radio company revenue growth expectations for the three analyst's side-by-side.
| View the Chart |

Back with a vengeance
Long-time radio analyst Jim Boyle is out with his first reports for his new employer, the boutique Wall Street firm CL King & Associates, and he is no shrinking violet. Boyle sees a tough second half of 2006 ahead for radio and he has issued his first-ever sell call - for industry giant Clear Channel. Despite the increased radio revenues that Clear Channel reported for Q1 over 2005, Boyle notes that its revenues were still behind Q1 of 2004, before its Less Is More initiative. "So after two years of change, CCU radio's top-line hasn't grown and its station operating income fell 16%. Audience increases have ground to a halt. Radio is suffering from 'pricing for share' and weak auto ad spending," Boyle said. So while Clear Channel's stock is down and it is somewhat insulated from the sagging radio sector by its outdoor business, Boyle doesn't think the stock is cheap enough yet. "With tougher comps coming up, its '06 lead in radio could reverse in '07," he said, suggesting that Clear Channel may only be temporarily outpacing an "old media" that is in "a secular downdraft." Despite insisting that radio is still a "good business," Boyle doesn't see any catalysts for near-term improvement and he worries that radio stocks could drop more to trade at EBITDA multiples more like those of another old media - newspapers. So, he has an "underperform" view of the sector and gave an "underperform" rating (a nice way to say sell) to the sector bellwether, Clear Channel. "In our opinion, Clear Channel's sheer size can be unwieldy in a management-intensive business," Boyle noted, suggesting that the company might be better off trimming its portfolio of 1,171 stations. "CCU might sell or swap hundreds of stations and still generate well over two billion in radio revenue, we imagine," he said. Boyle also issued his first report for CL King on Saga Communications, giving it a "neutral" (hold) rating, noting that it is beset by format attacks in its largest market and thus lags other companies in the sluggish radio industry.

RBR observation: Big isn't always better. If CBS Radio is successful in selling off the 10 non-core markets that it is shopping at decent prices, pressure will grow on Clear Channel to do likewise. Boyle, who is alone among Wall Street analysts in actually having worked in broadcasting, is finally telling The Street what many people inside the business have been saying for years: "in a management-intensive business, the giant radio platforms have too many 'balls in the air,' which has led to sub-par growth, in our analysis."

Arbitron PPM rollout will be by the book
Bill Kelly, VP/MM for Clear Channel Youngstown and Chairman of the Arbitron Radio Industry Advisory Council, told RBR that the Council was assured that upcoming rollout plans for PPM in Houston and Philadelphia would go forward only with proper MRC accreditation. "They're playing it by the rules," he said. He said Arbitron assured the Council that it believed in the MRC's process. It will not just sit around waiting for MRC's blessing. In Philadelphia, it is getting things ready so the program will pop once it is cleared. That includes recruiting survey participants and providing updated encoders to Philadelphia radio stations. Also, XM and Sirius will start showing up in local books in the Fall 2006 survey on a channel-by-channel basis, on equal footing with local radio stations. In other words, if XM SquiZZ or Sirius Classic Vinyl (to use two randomly-selected examples) pull in enough listeners to score an 0.1, they'll be in. Similar plans are in the works for HD radio side channels down the road. The important point is that all such audio services will be measured on an equal footing. Finally, Arbitron explained its decision to release Spring 2006 books for both the New Orleans LA and Biloxi-Gulfport-Pascagoula MS markets on 8/14/06. It says it's confident in its new population estimates and will release a white paper of the topic before the ratings are released. Ratings for both markets have been suspended since Hurricane Katrina hit in August 2005, with both losing the Fall 2005 surveys. New Orleans, which unlike Biloxi is measured four times a year, also lost Summer 2005 and Winter 2006 books. The Council has signed off on the plan; it remains for local broadcasters to decide whether or not to use the surveys.

RBR observation: First reaction will be getting POed if, and it is a big if, XM and Sirius should happen to show up in your ratings book. But get real as the theme for Arbitron this Fall will be 'Follow the Audio' just as Nielsen's agenda in TV is 'Follow the Video.' Finding, reporting where and what listeners are listening to or viewing are both ratings companies' job functions. This is the real world and broadcasters use the intelligence to be a better broadcaster as we can not hide the fact that satellite radio exists.

Radio rides sidesaddle into the black
The proportion of local to national business in the radio biz is such that the 1% loss in local reported by Radio Advertising Bureau in its latest sounding from Miller Kaplan Arase & Co. would drown out the 1% gain. 99 times out of 100, the result would be minus one for the month. But the relatively new non-spot revenue category came forth cavalry style with flying flags and bugles trumpeting a 17% gain over June 2005. That result managed to pull the month just into the black, with a 1% total gain. YTD, local is at -1%, national is even and non-spot is at +8%, producing a flat result overall. Q2 came in one percent below Q2 2005. The year-long slump in local business continued. The industry managed a modest 1% gain in the main category in May, but every other month has been in the red.

RBR observation: Unless radio companies want to start advertising as Joe's AM/FM Radio and Car Wash, the industry is going to have to find a way to fix the problem with local. If the business is going to start relying on side shows, then pretty soon the core will be the side show and the side show will be the core. We keep hearing about money flowing into the Internet before it ever gets far enough downstream to irrigate arid radio bank accounts. However, studies we've seen show that Internet venues have yet to figure out a good way to provide local service. Radio must make sure it's delivering and selling strong local content. Some have indicated that the Internet fad will go away soon. We think you'd better do your bit to chase it away, before you discover it isn't a fad after all.

Sales & Marketing Business Report

New electronic buying systems
Seems there are plenty of new entrants in the electronic buying systems marketplace. Some have more to offer than others. We asked Kathy Crawford, MindShare President/Local Broadcast, what she thinks about, and she wants from these systems.

A wish-list for the new
electronic buying systems
By Kathy Crawford,
MindShare President/Local Broadcast
I have been pitched pretty much all of the electronic media systems out there and they fall into essentially two categories. The first category is the online auctions. The second category is the full blown systems. There is a hybrid of both of these which is some of the online systems are moving in the direction of being a media buying and selling system that mirrors the way we buy time now. The online auction systems are really more geared towards remnant inventory, which would not affect the major agencies by and large. The systems such as what Strata re talking about are geared towards the future of what we think the industry will really look like. Strata and other companies are trying to get us to an electronic commerce position the way we do business today, before we talk about how we're going to do business in the future. The online auctions are really for single advertisers or direct response kind of buying where it is less dependent upon a full media plan that has communication goals, etc and that can be used with stations in the market that a participating in the auction. The online auctions for that reason wouldn't be used primarily by the larger agencies because they won't encompass the entire marketplace and may not have available the dayparts or programs that are required in the media plan. On eBay you have the Buy Now option; well that's probably the open rate card, in theory. No media agency buys that way nor would they. And that really doesn't change the model so the questions for eBay is are they going to change the model? I mean is everything going to go through PayPal? I'm asking that question because one of the problems with the online auctions is there is no billing piece. And then the stations have to run the schedules, which they don't do now. Things change all the time and we end up with 85% discreps now. The station still has the right to move their inventory. In the eBay scenario with no human being involved, how would that really work? eBay is probably going to have to build something and that's going to take a couple of years.

Tomorrow: A look at the specific providers.

Ad Business Report TM

HD Digital Radio Alliance launches
"Discover It!" branding initiative
The HD Digital Radio Alliance launched its radio and online campaign and marketing strategy today which will take place in 50 markets on all Alliance radio stations. The Alliance, which will have a new tag of "Discover It!," will become the #1 or #2 biggest radio advertiser in each of these markets with 90+ spots running. The new branding initiative includes the rollout of a new brand identity and tagline, new creative, online marketing elements and the involvement of new agency and retail partners. The "Discover It!" campaign invites consumers to discover new, free, digital quality radio programming and new "stations between the stations" available with HD digital radio. The campaign launches in 22 new markets and 28 existing HD radio markets for a total of 50, and can be heard in 43 of the Top 50 markets.
| The new creative can be heard here |

Amazon.com also joined existing retail partners like RadioShack, Tweeter and Crutchfield as the newest major retailer to carry HD receivers. Joining existing Alliance agencies Brainerd Communicators and Texas Creative, the "Discover It!" tag was developed by NYC branding agency Siegel & Gale, and actualized into new creative by Via Now, CC Radio Creative Services Group and Texas Creative.

RBR observation: As we mentioned recently in a News Analysis (7/21/06 RBR #141), new creative hyping HD-2 formats was absolutely necessary. The new spots we listened to, however, contained very little music, nor were the formats named. The creative still points at the new digital stations without playing the actual formats. We think collages of the extra formats done in snippets would be pretty effective, beyond "sub-stations and secret stations located between the ones you hear now." Play a piece of the new track from Thom Yorke: "Black Swan"; play something from LCD Sound System; play a Dance Hall or Roots Rock Reggae tune; play a thumpy Techno/Drum & Bass tune; play an obscure Jimi Hendrix guitar jam. Tease the listeners with the music, rather than forcing them to use their imagination so much. Of course, it would be nice if all markets had such HD-2 format choices! It would also be nice if stations' websites had clear mentions of their HD-2 formats, but you'd be surprised how few do. Driving people to HDRadio.com isn't quite as effective. But hey, with the frequency of messaging this campaign is hitting, there's going to be some measurable results, for sure.

Media Markets & Money TM

Veteran broadcasters
are new kids on the block
Both Bruce Mittman and Jim Leven have long radio resumes. They are now set to get even longer, with a station portfolio attached, following their announced intention to acquire a seven-station group in and around Watertown NY from the Clancy Mance radio group. The new group will be called Community Broadcasters, and it'll kick off with five FMs and a pair of AMs with WATN-AM, WBDI-FM, WOTT-FM and WTOJ-FM located in the Watertown area, WSLB-AM and WBDB-FM well north on the St. Lawrence River in Ogdensburg, and with WGIX-FM splitting the difference between the two communities in Gouvenour. The seller was assisted by broker Dick Kozacko, and will collect approximately 5.5M for the stations. Both Mittman and Leven are former owners, and Mittman will continue to run Boston-based advertising and media buying Mittcom as a separate entity. Community Broadcasting will achieve grouphood at closing, and indicates it plans to continue to grow.

Tidewater price revealed
Red Zebra Broadcasting will be paying 4.25M to add a third market to its fleet of Washington Redskin/ESPN-themed Sports stations. The pricetag was revealed in the FCC filing to acquire WWHV-FM Virginia Beach in the Norfolk-Virginia Beach-Newport News market from On Top Communications. Red Zebra is anchored around Washington DC and also has announced plans to acquire an AM station in Richmond.

Washington Media Business Report TM

Campaign funding reform
back on the agenda
US Representatives Marty Meehan (D-MA) and Christopher Shays (R-CT), the House side of the bipartisan group of legislators that included John McCain (R-AZ) and Russ Feingold (D-WI) which brought us the Bipartisan Campaign Reform Act, are back. So is Feingold. Having taken note that both candidates for president opted out of the public campaign finance system in 2004 since its ceilings and matching funds have not kept up with the escalating cost of campaigns, they are seeking to apply a legislative mending job. The proposed fixes were noted in a letter from watchdogs to members of Congress, written to solicit additional co-sponsors. The fixes include: " * Raise the spending limits for the primary and general elections and increase the amount of public funds available to presidential candidates for these races; * Make public funds available to primary candidates earlier in the process; * Provide additional public funds for a publicly-financed candidate where a privately-financed candidate has significantly outspent the spending limits applicable to the publicly-financed candidate; * Increase the public funds available to pay for the presidential system; and * Prohibit the national parties and their agents and officers, and federal officeholders, from raising or spending soft money to pay for the party nominating conventions." The watchdogs include Campaign Legal Center, League of Women Voters, Common Cause, Public Citizen, Democracy 21 and U.S. PIRG.

RBR observation: This is an election year, but this legislation is obviously aimed at 2008, not 2006. Although George W. Bush has proven to be perhaps the greatest fund-raiser in the history of this nation, we'd expect even more money to flow into broadcast coffers from politicians in 2008 than there has been in the past. In 2000, Bush dispensed with primary challenger John McCain fairly early in the primaries (and on the Democratic side, Al Gore only had to stand down a weak challenge from Bill Bradley), and Bush faced no meaningful primary challenge whatsoever in 2004. Next time around there figure to be dogfights for both nominations. If there is a way to legislatively put a finger in the dike and hold down the amount of cash flowing into political campaigns, no one seems to have yet discovered it.

Broadcasters get a break at Open Meeting
The FCC's Commissioners come out in the spotlight next week on Thursday, 8/3/06 for the August Open Meeting. But broadcasters need pay scant attention to the proceedings. They'll be considering "United Power Line Council's Petition for Declaratory Ruling Regarding the Classification of Broadband over Power Line Internet Access Service as an Information Service," "Amendment of Part 15 regarding new requirements and measurement guidelines for Access Broadband over Power Line Systems," and an NPRM "regarding possible changes to the rules governing wireless licenses in the 698-746, 747-762, and 777-792 MHz Bands."

RBR observation: The Commission's open meetings usually occur on a date in the teens, numerically. Except the August date which usually occur on the first available Thursday if not some other day during the first week of the month. That's because anyone who can gets the h*** out of Washington during August. That's what some of us will be doing...

Entertainment Media Business Report TM

Sirius Jam On channel to commemorate Jerry Garcia
Sirius announced "Not Fade Away: A Jam On Celebration of Jerry Garcia," an 8-day celebration of the life and music of The Grateful Dead's Jerry Garcia. It will run Tuesday, 8/1 at 7 am ET through Wednesday, 8/9 (the eight-day period between Garcia's birthday and the anniversary of his death) on Ch. 17, Jam On. Friends, family members, former bandmates, other musicians, along with fans and listeners, will share their memories of Garcia, and his music.

Monday Morning Makers & Shakers

Transactions: 6/12/06-6/16/06
In station trading, often all we need is one transaction to end a slump, and that's pretty much what happened this week. Gannett's Atlanta TV buy was good for 180M two radio transactions pushed the total near 200M, and a whole slew of little radio acquisitions nudged the total over.

6/12/06-6/16/06	Total
Total Deals	15
AMs	9
FMs	12
TVs	1
Value	200.235M

| Complete Charts |

Radio Transactions of the Week
Dallas AM goes for 9.25M
| More... |

TV Transactions of the Week
Multimedia giants shake hands
| More... |

Transactions

42,456,094 WOLF-TV/WQMY-TV Wilkes Barre-Scranton PA (Hazleton, Williamsport PA); WPXT-TV/WPME-TV Portland-Auburn ME (Portland, Lewiston ME); WDSI-TV Chattanooga TN; WTLH-TV Tallahassee FL-Thomasville GA (Bainbridge GA); and WGFL-TV Gainesville-Ocala FL (High Springs FL) from Pegasus Satellite Communications Inc. (Bradley E. Scher et al) to MM Broadcasting LLC (Edward Mule, Robert O'Shea). 2.5M escrow, balance in cash at closing. Remaining digital buildout expenses incurred by buyer will be deducted from purchase price. Chapter 11 proceeding. Includes five low power/Class A television stations. Existing duopolies in Wilkes Barre-Scranton PA and Portland ME. WOLF-TV is a Fox affiliate on Channel 56; WQMY-TV is a WB/UPN affiliate on Channel 53; WPXT-TV is a WB affiliate on Channel 51; WPME-TV is a UPN affiliate on Channel 35; WDSI-TV is a Fox affiliate on Channel 61; WTLH-TV is a Fox affiliate on Channel 49; WGFL-TV is a CBS affiliate on Channel 53. [File date 7/10/06.]

19M KKLS-FM/KFXS-FM/KKMK-FM/KOUT-FM & KBHB-AM/KRCS-FM Rapid City SD (Rapid City, Sturgis SD) from Monterey Licenses LLC, a subsidiary of Triad Broadcasting Company LLC (David J. Benjamin) to New Rushmore Radio Inc., a subsidiary of Schurz Communications Inc. (Markia K. Burdick, Sally J. Brown, Todd Schurz). 950K escrow, balance in cash at closing. Existing superduopoly. [File date 7/12/06.]

490K WFLN-AM Arcadia FL from Integrity Radio of Florida LLC (George Kalman) to La Raza 1480 Inc. (Oscar Alvarado, Victor Carrion). Two 25K deposits, balance in cash at closing. [File date 7/11/06.]

Stock Talk

Slower growth raises hopes
A government report of slow GDP growth, an annual rate of only 2.5% in Q2, had stock traders hoping the Fed would end its rate hikes and sent stocks higher. The Dow Industrials rose 119 points, or 1.1%, to 11,220.

Radio stocks followed along, with virtually all posting gains. The Radio Index moved up 3.041, or 2.2%, to 142.426. Cumulus led the way, up 3.8%, with Emmis up 3.6%, Cox up 3.3% and Radio One (Class D) also up 3.3%.

Convinced that the bad news for satellite radio is all known, investors sent both stocks up. XM shot ahead 16.4% and Sirius gained 4.3%.

Radio Stocks

**Here's how stocks fared on Friday**
Company	Symbol	Close		Change	Company	Symbol	Close		Change
Arbitron	ARB		36.74	+0.77	Hearst-Argyle	HTV		20.24	+0.13
Beasley	BBGI		7.00	unch	Journal Comm.	JRN		10.57	+0.08
CBS CI. B	CBS		27.25	+0.42	Lincoln Natl.	LNC		57.01	+0.89
CBS CI. A	CBSa		27.30	+0.53	Radio One, Cl. A	ROIA		7.16	+0.21
Citadel	CDL		9.17	+0.22	Radio One, Cl. D	ROIAK		7.19	+0.23
Clear Channel	CCU		28.98	+0.33	Regent	RGCI		4.03	+0.02
Cox Radio	CXR		14.62	+0.47	Saga Commun.	SGA		7.67	+0.22
Cumulus	CMLS		9.34	+0.34	Salem Comm.	SALM		12.12	+0.21
Disney	DIS		29.70	+0.49	Sirius Sat. Radio	SIRI		4.14	+0.17
Emmis	EMMS		14.83	+0.51	Spanish Bcg.	SBSA		4.67	-0.01
Entercom	ETM		25.42	+0.57	Univision	UVN		33.49	+0.19
Entravision	EVC		7.88	+0.17	Westwood One	WON		6.79	+0.14
Fisher	FSCI		41.07	+0.23	XM Sat. Radio	XMSR		12.67	+1.78
Gaylord	GET		38.21	+0.58	-	-	-	-	-

Bounceback

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Below the Fold

Ad Business Report
HD Digital Radio Alliance launches
Discover It! A Branding initiative taking place in 50 markets on all Alliance stations...

Sales & Marketing Business Report
New electronic buying systems
Kathy Crawford, MindShare President/LB Pt 1: Plenty of new entrants in the electronic buying systems marketplace...

Media Markets & Money
Veteran broadcasters are new kids
Bruce Mittman & Jim Leven to acquire a 7-station group in ...

Washington Media Business Report
Campaign funding reform
Back on the agenda...

Stations for Sale

CD Border 25kw FM
Profitable competitive op.
Small/dual market FM with huge upside for turnaround operator.
595K 781-848-4201 or [email protected]

Radio Media Moves

New MAB officers
The Michigan Association of Broadcasters (MAB) elected officers for 2006-2007 at its Annual Meeting last week. The newly elected officers are: Chairman - Mario Iacobelli, President and CEO of WWTV/WWUP-TV in Cadillac-Traverse City; Vice Chairman-Chairman Elect - Bart Brandmiller, Vice President and Market Manager of Clear Channel Lakeshore in Muskegon; Treasurer - Diane Kniowski, President and General Manager of WOOD-TV in Grand Rapids; At Large - Tom Mogush, General Manager of WMQT-FM/WZAM-AM in Marquette; and Immediate Past Chairman - Julie Koehn, President and General Manager of WLEN-FM in Adrian.

More News Headlines

VNU shareholders
vote to go private
The vote was never in doubt, but Valcon on Friday voted its 99.5% of VNU shares in favor of taking the company private. Thus, by making the change under Dutch law, the former VNU N.V. (a public company or naamloze vennootschap) is now VNU Group B.V. (a private company with limited liability or besloten vennootschap met beperkte aansprakelijkheid). Also formalized at the special shareholders meeting was the election of the new directors nominated by the Valcon consortium (7/24/06 RBR #142).

CPB looking to upgrade noncom radio
The Corporation for Public Broadcasting thinks that many of the stations in the non-profit sector are under-performing, but with a little help, can ratchet up their performance. A brokerage/ consultancy specializing in noncoms, Public Radio Capital (PRC), has been hired to conduct evaluative "makeovers." They'll look at several specific areas of concern, including "governance and licensee issues; station management and leadership; programming strategy and execution; fundraising and organizational capacity." They'll start out working with ten stations over six months in a program expected to last two years.

Big Boy to cater Marconi Awards
No, wait, we misunderstood. You'll still get Hilton food, and likely not burgers, but KPWR-FM Los Angeles morning personality Big Boy will be master of ceremonies for the Marconi Awards Dinner & Show on Thursday, September 21st during the NAB Radio Show in Dallas. In addition to hosting "Big Boy's Neighborhood" on the Emmis station, he also has a nationally syndicated weekend show, "Big Boy's Hip Hop Spot," distributed by X Radio Networks. We're willing to bet that neither show has ever featured a song by "The Formats," with FCC Commissioner Jonathan Adelstein on harmonica, who will be performing at the Marconi Awards.

TVBR - TV News

CBS pays to appeal Jackson fine
The running clock on the Parents Television Council, marking the time CBS had left to pay off the 550K Janet Jackson Super Bowl wardrobe malfunction fine, stopped today at three days, 11 hours, four minutes and 28 seconds. CBS paid the fine, but only because that's the requisite first step before taking the matter to court. The court will be the United States Court of Appeals for the Third Circuit, of Prometheus v. FCC fame. CBS said, "CBS is filing today an appeal with the United States Court of Appeals for the Third Circuit seeking to overturn the FCC's finding that the 2004 Super Bowl half-time broadcast was legally indecent. A prerequisite for filing this appeal is to pay the $550,000 fine, which we are also doing today only for this procedural reason. CBS has apologized to the American people for the inappropriate and unexpected half-time incident, and immediately implemented safeguards that have governed similar broadcasts ever since. However, we disagree strongly with the FCC's conclusions and will continue to pursue all remedies necessary to affirm our legal rights." The FCC fired right back, saying, "The Commission will vigorously defend the Forfeiture Order issued against CBS. CBS' continued insistence that the halftime show was not indecent demonstrates that it is out of touch with the American people. Millions of parents, as well as Congress, understand what CBS does not: Janet Jackson's 'wardrobe malfunction' was indeed indecent."

RBR observation: This should be the best fight since Ali v. Frazier.

RBR Radar 2006

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

Churn bites XM;
Subscriber forecast cut
For years RBR has been predicting that increasing churn would prove to be a problem for satellite radio companies, with disconnects by once-paying customers increasing at the same time it becomes more difficult to attract new ones. In his quarterly conference call, XM Satellite Radio CEO Hugh Panero admitted to Wall Street that churn was a problem in Q2 and contributed to the company reporting subscriber numbers that fell short of expectations. In an attempt to deal with the churn problem, Panero is promising better customer service.

RBR observation: New XM President Nate Davis has a big job ahead of him. He is recruiting a Chief Marketing Officer to oversee all sales and marketing efforts, but for now he is the point man on dealing with the twin problems of boosting the percentage of new car buyers who convert from test listeners to paying subscribers - expected to drop to 52% in Q3 - and keeping paying customers from canceling their subscriptions.
07/28/06 RBR #146

Layoffs at Westwood One
No surprise here, after new CEO Peter Kosann reported dismal results for Q1 and indicated that Q2 would be a tough one as well. Westwood One hasn't yet scheduled its Q2 conference call, but when it comes Kosann will be able to tell Wall Street that he is reducing costs. Pink slips went out yesterday in a staff reduction that a company spokesman said was across the board and affected WW1 operations nationwide.

RBR observation: Who will be next? The staff cuts at WW1 come just a week after 115 people were pink-slipped at CBS Radio. We wondered if new competitor Traffic.com had anything to do with Metro's problems. Traffic.com's earnings issued a day earlier included 10 million in radio ad sales. That's 10 million that Metro-Shadow would have or should have had before Traffic.com came on the scene.

RBR note: Hold on tight during Q2 calls as it is going to be a hard ride. Negative earnings have a way of affecting the total radio medium as it run down hill. Leadership need more than ever and RBR will do our part to help all not just with blood and guts news but with solutions to work out of this mess. Stay with us.
07/28/06 RBR #146

Ownership comments
already flowing
5,357 comments have already been entered in the FCC database under Docket 06-121, referencing the FCC's proceeding on media ownership rules and regulations. We sampled quite a few of these comments, which have come in from all over the country. Almost all of them say this: "Dear Commissioners: Please don't allow more media consolidation.

RBR observation: Have mouse, will comment. We think comments on any topic would carry much more weight if they are original, and there may well be original thoughts contained somewhere within the pile of entries. Perhaps the FCC should maintain two response piles, one for obvious click-and-send entries and another for actual self-written comments.
07/27/06 RBR #145

Prediction is no Radio misses
Wall Street gets really upset when a company misses its financial targets, but with Q2 reporting by radio companies coming mostly in the next two weeks. Wachovia Securities analyst Marcia Ryvicker says she doesn't expect to see any radio companies miss their numbers. In fact, she thinks there could be a couple of up-side surprises from Clear Channel (CCU) and Entercom (ETM). Lehman Brothers analyst Anthony DiClemente is correct in his predictions, it ain't gonna be pretty. He estimates that radio industry revenues were down 2% in Q2.
07/27/06 RBR #145

General Manager
Saga Communications, a top of the line radio and media company really has a rare opening at Rock 102 and Lazer 99.3. Saga carefully reviews all GM applicants but this opportunity necessitates being extra picky. Considering only GM's with a documented reputation for effective leadership and management to oversee these facilities that are accustomed to high standards at all levels. Excellent facilities, benefits and quality of living in Springfield, MA. Saga a top of the line company committed to excellence in media today. EOE.
See Radio Careers

General Manager
Needed for growing multi-station radio group in Mid-Atlantic region. Must have 6+ years of GM experience with proven results. Quality leadership skills with a strong sales background and totally familiar with all aspects of management. Great opportunity with Excellent benefits.
See Radio Careers

Hard finding that key person
to fill the important position at your organization? RBR's - Media HeadHunters is the place that key media firms use to get results. See www.mediaheadhunters.com and get results with service--Period.

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