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Volume 23, Issue 149, Jim Carnegie, Editor & Publisher

Wednesday Morning August 2nd, 2006

Radio News ®

New analyst sees
troubles for radio
Morgan Stanley analyst Benjamin Swinburne has initiated coverage of five radio stocks, but worries that radio is losing listeners and advertising share, so historically low stock prices are not bargains for investors. "The stocks may be at historical lows of 10 times EBITDA, but they face significant secular headwinds. We believe radio will continue to lose advertising share to Internet, TV and Outdoor and that Internet (classified and paid search) in particular represents a major threat. We also believe greater programming investment is needed to stem usage declines of 1-2% per annum and that pricing weakness will only abate following the deployment of a new digital measurement system to provide real-time and accurate ratings data," Swinburne said in his initiation report on the radio sector. His only overweight (buy) recommendation is for Cox Radio, based on the possibility of Cox Enterprises taking it private. Otherwise, he sees no reason for investors to buy the stocks. He ranks Radio One at equal-weight (hold) "due to its low relative valuation." Swinburne gave underweight (sell) ratings to the other three - Clear Channel, Entercom and Cumulus.

Happy days for Mel
Unlike XM Satellite Radio, which lowered its guidance for the rest of the year after hitting some potholes in Q2 (7/28/06 RBR #146), Sirius Satellite Radio raised its full-year guidance after reporting strong Q2 results. Instead of 600 million in revenues this year, Sirius is expecting 615 million. Instead of over 6.2 million subscribers by year end, Sirius has now set the target at 6.3 million. And Sirius is not encountering the churn problem that has hit XM, so Sirius is projecting that its monthly churn rate will hold steady at 1.8%. So CEO Mel Karmazin was a happy guy as he discussed the quarter with analysts in his quarterly conference call. He proudly crowed that Sirius is beating XM in the retail category, while building subscriber additions from its OEM auto sales as well. Karmazin noted that some analysts believe the Howard Stern effect will only last a few quarters, but he insists that Stern and other Sirius content will give his satellite company a long-term advantage over XM. Karmazin is so confident that he assured Wall Street that Sirius will hit these aggressive targets: One billion in revenues in 2007, three billion in revenue in 2010, cash-flow positive in 2007 (possibly in Q4 of this year) and one billion of cash flow in 2010. Meanwhile, he played down the NAB's request to the FCC this week for a recall of all XM and Sirius plug-and-play receivers that violate emission standards. Karmazin insisted that a recall would "not be in the public interest at all" and there are more simple solutions.

RBR observation: Mel was also excited about plans for a Q4 marketing push featuring Howard Stern to convince his millions of fans who haven't yet done so to buy satellite radio receivers and subscribe to Sirius. He said this will be the first holiday sales season with Stern officially pitching Sirius. It seems to us he did a pretty good job unofficially last year plugging Sirius time and time again on his syndicated radio show. Back then he had millions of listeners. Now he has thousands - and they are the ones who already have Sirius subscriptions. Just what can the "King of All Media" possibly do now that could come close to matching the hype of last year?

Move over Mom and Pop, and make room for AP
The Associated Press, the New York Times, USA Today International, Bloomberg and PBS all received government contracts from the Bush administration during 2005. That is not a particularly surprising fact. What is surprising is that they were listed as small businesses for administration accounting purposes. The Associated Press itself reported that the take for the media companies was relatively small, and they were hardly the only large companies to get tossed into the mix, joining the likes of WalMart and Home Depot. Neither did any of the companies apply for the contracts under the guise of being a small business, and all of the contracts were for relatively small amounts of money, at least in the case of the media companies. Most of them speculated that the small business classification was a government clerical error. The "most" did not include Democrats in the House of Representatives, who think the administration was padding numbers to reach a 23% threshold, the level of work the administration is legally required to funnel into the small business sector. About 12B is said to have gone to misclassified companies, a figure the Dems say knock the small business slice down to about 22%.

RBR observation: It's good to know that the many small radio and television companies out there will not have to elbow these media giants out of the way the next time they try to utilize the services of the SBA.

Nats cable rights sent to adjudication
The MLB Washington Nationals are well into their second season of play in the nation's capital, but are still largely unavailable to many cable subscribers in the area due to a dispute between TCR sports Broadcasting and Comcast. The FCC, using a plank related to its approval of the Adelphia sale, is not providing a resolution, but it is forcing one. TCR is controlled by the Baltimore Orioles and operates the Mid Atlantic Sports Network, which controls MVPD broadcast rights to Nats. Comcast's own regional sports network, Comcast SportsNet Mid-Atlantic, has Orioles rights through the current season, but will lose that to MASN. Comcast has been arguing that it has the right to bid on Orioles carriage beyond the current contract, and while that dispute goes on, Comcast is not carrying MASN on any of its systems in the Washington area. It's been trying to get an equity position in MASN before agreeing to carriage. The FCC said, "...we find that TCR has established a prima facie showing of discrimination..." but also says factual matters under dispute prevent it from granting relief. The case has been referred to an Administrative Law Judge. The parties also have the option of resorting to an Alternative Dispute Resolution (arbitration), with reporting requirements to keep the FCC abreast of progress. FCC Commissioner Robert McDowell, a proponent of the measure, said, "As I have stated previously, speedy resolution of carriage disputes is critical, especially where regional sports networks are concerned. The paths we have outlined in the Adelphia Order and in this Order both provide the opportunity to settle the dispute between TCR and Comcast well before the next baseball season begins."

RBR observation: Can you imagine if "must-have" status were conferred on radio programming? In approving the Adelphia spin to Time Warner and Comcast (which just closed, by the way), the FCC declard that major sports programming is "must-have," and also that it will operate on a case-by-case basis when similar disputes come up. Democrat Michael Copps wondered by sports is deemed the only must-have programming. It will be interesting to see if this becomes a precedent for similar disputes in other programming categories as time goes by on the video side. Is there any chance this might become an issue on the audio-only side? We doubt it, but strange things can happen in Washington...

PTC goes after CBS
"CBS is two-faced," claims Parents Television Council President L. Brent Bozell. "The company apologized profusely after the incident happened and reminded the public last week that it had apologized. What it's not telling the public in its press releases is that its lawsuit maintains there was nothing indecent about Janet Jackson exposing herself during the football game with millions of children watching." He continued, "If this incident was not indecent, as CBS is claiming in court, why is CBS apologizing? If CBS is honest in its apology, why is it filing a lawsuit claiming the incident is not indecent?" And "Not only does CBS feel it has the 'right' to air nudity over the public airwaves, it also thinks parents should be the ones taking responsibility for the raunch that's broadcast into their living rooms."

RBR observation: CBS did apologize. It was as surprised as anybody by Jackson's actions, and CBS agreed with most that the so-called wardrobe malfunction was in extremely poor taste. Many thought the entire Super Bowl halftime show preceding the incident was in bad taste. The question remains, however, if it was actionably indecent. Was it "nudity," as Bozell seems to imply? If the government is going to start tossing around six- and seven-figure fines and put broadcast licenses in jeopardy, at a minimum it must clearly define the crime. That does not mean checking in with Bozell or anyone else for a review. We'll be very interested to hear what the courts have to say on this matter.

Radio Disney leaves ABC Radio
There's still no indication when regulatory approvals may come for the pending sale of ABC Radio to Citadel Broadcasting, but Disney is moving ahead with preparations for the split. Radio Disney, which is not included in the sale, has been taken out of ABC Radio to become a part of the Disney-ABC Television Group. The kiddie net and its O&O stations will now be overseen by Rich Ross, President of Disney Channel Worldwide. Jill Casagrande, former Sr. VP of Programming for Disney Channel, has been named Sr. VP and General Manager of Radio Disney. ESPN Radio and its O&Os are also not part of the deal and will remain with Disney.

Wall Street Media Business Report TM

Q2 Conference Calls
Sirius by the numbers
Both satellite radio companies continue to burn through money as they race forward toward the point where revenues are supposed to surpass expenses. Q2 revenues for Sirius jumped 188% to 150.1 million as its subscriber count increased by 158%. Costs also increased, though, so Sirius' adjusted loss from operations worsened by 17.7 million to 126.5 million. On the bottom line, the net loss per share grew by a penny to 11 cents.

Sales & Marketing Business Report

Close-up: 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 wants from these systems.

A wish-list for the new electronic buying systems
By Kathy Crawford, MindShare President/Local Broadcast
Yesterday Kathy discussed some of the specific providers in the space (8/1/06 TVBR #148).

It's not to say that the future isn't "click and go there" because it could, but all this stuff is standalone and doesn't go into my usual system. So I can't make a buy without having a billing piece to it. And then I've got paper invoices. I need to have a whole system. Now I'm talking from the point of view of a big agency. There are smaller agencies that could certainly do this if it didn't matter to them how much weight was out there or wasn't. It could be a retail operation that is driving people to a store. That could be done through this without a big media plan. And let us not forget Direct Response. Stations complain all the time about payment, but they don't take responsibility for the problem of preemptions and therefore discrep problems. If they would stop having these preemptions with no notice and allow us access to their traffic system that would change the world. If you go from one end to the other and you say, "Okay week one we're going to upload to everybody what their schedule was versus what they purchased," that would shut the whole discrep issue down. Their payment would be timelier. Discreps wouldn't exist. This model of preemptions to maximize inventory has got to go away in order for the stations to get paid in a timelier manner. The auction model is not the answer to our commerce. E-change has got to happen. Right now, we can electronically order but we can't make changes to the schedule electronically and that's just ridiculous. We have to be able to do changes electronically. And if we could have the whole thing electronically, wouldn't that solve a lot of problems?

TOMORROW: RATINGS AND RESEARCH
Close-up: The future of radio ratings
With the Next-Generation Electronics Ratings Evaluation Team down to two finalists to bring electronic ratings to US radio, RBR asked both The Media Audit/Ipsos (TMA/I) and Arbitron to answer a series of questions about their systems.

Ad Business Report TM

Event marketing leads NTR categories
The Radio Advertising Bureau has released a study of non-traditional revenue, and the results suggest that we may be approaching the point where the "non-" will need to be removed. Based on activity in 2005, RAB found that only 14% of all stations pursuing NTR cash did so for the first time that year. Against that number are 51% which have been at it for five years or more. Most stations pursue multiple NTR avenues, and almost all, 94%, use event marketing. Other sources of cash flow include cause-related marketing, used by 64%, the Internet (61%), sports marketing (51%), in-store programs (50%), recruitment (42%) and working with a dealer group (37%). Nine out of 10 stations are increasing their NTR activity this year, while 8% maintain their current level and a scant 2% cut back.

MRA gets Caesars Pocono account
Caesars Pocono Resorts, owned by Starwood Hotels and Resorts Worldwide, has chosen MRA as its agency of record after a competitive review of 12 agencies. As AR, MRA MRA will be responsible for developing and executing advertising, media placement, creative, web and brand development and public relations activities. The account will be serviced out of MRA's headquarters in Syracuse, NY. The agency has additional office locations in Atlanta, GA and Wilmington, NC. Located in the Pocono Mountain region of Pennsylvania, Caesars Pocono Resorts four locations - Pocono Palace, Paradise Stream, Cove Haven and Brookdale-on-the-Lake - have catered to the needs of romantic travelers since 1958. Know for its heart-shaped whirlpools baths, 7-foot tall "Champaign Towers" whirlpools, in-room pools and world-class entertainment, the resort hosts over 80,000 couples every year.

Take that, Starbucks

Reprising the old blind taste test that Pepsi used to attack Coke, Eight O'Clock Coffe has launched a new series of TV spots claiming that blindfolded consumers prefer the taste of Eight O'Clock Coffee's Original Ground Coffee is preferred over Starbucks House Blend Ground Coffee. The national ad campaign, developed by Respond 2 Communications, includes two different spots which can be viewed on www.eightoclock.com. The advertisements include a call to action for consumers to visit a website to download a coupon for all varieties of Eight O'Clock Coffee. "We have been roasting whole bean coffees for nearly 150 years and are thrilled to reinforce to coffee fans that not only do we have a ground coffee option and new flavors, but also to announce that the taste of Eight O'Clock ground coffee is preferred over Starbucks," said David Allen, Vice President of Marketing, Eight O'Clock Coffee. The new campaign launched this week on broadcast and cable TV.

Media Business Report TM

Newspaper companies settle Internet stakes
The sale of Knight-Ridder to The McClatchy Company left in doubt the ownership of new media ventures in which KR was a partner with Gannett and Tribune Company, but that has now been settled. In a deal announced yesterday, Gannett and Tribune will each increase their one-third stake in CareerBuilder and ShopLocal.com to 42.5%, with McClatchy retaining a 15% stake in each. Gannett and Tribune will increase their stakes in Topix.net to 31.9% each and McClatchy will retain 11.25% - the rest is held by others. As part of the agreement, McClatchy will receive a total of 310 million from Gannett and Tribune. The deal values CareerBuilder at 1.55 billion, ShopLocal.com at 85 million and Topix.net at 72 million.

Media Markets & Money TM

Close encounter in Plattsburgh
Hall Communications has completed its acquisition of WBTZ-FM, according to Doug Ferber of Star Media Group (Gregg Johnson of BIA Capital also had a hand in the transaction). The station serves the Burlington VT-Plattsburgh NY market from the NY side, and is the second half of a two-station acquisition that also included WIZN-FM Vergennes VT. WBTZ-FM came from Plattsburgh Broadcasting Corp. for 2.5M (4/21/06 RBR #79). The WIZN-FM deal was for 14.5M, with Burlington Broadcasters, and included an LMA/option for WBTZ. Hall's other properties in the market include WJOY-AM & WOKO-FM in Burlington and WLOK-FM in Plattsburgh.

Washington Media Business Report TM

For whom the FCC tolls
Well, surprising as it may seem, it tolls for the blue-spotted salamander. In the Boston area, Clear Channel, Champion Broadcasting and Beasley have been trying to upgrade WKOX-AM, WUNR-AM and WRCA-AM, respectively, for some time, but their FCC-approved construction permits have been tied up in with local governments enforcing environmental protections for the aforementioned amphibian. The FCC has already granted tolling on the CPs while the case progressed, but even that has not proven to be enough. The sensitive nature of the nature involved has caused prohibition on construction during migration and breeding (mid-February to mid-May) and restricts such activities during the time young salamanders are dispersing to establish themselves in the area, from the beginning of July through the end of September. The FCC says that only "rare and exceptional circumstances" will move it to grant extra construction time, and that "The present circumstances meet that standard." The three companies aided their cause by producing detailed construction plans, if additional time is granted, taking advantage of all opportunities within the environmental restrictions imposed. For example, they cannot work outside in the February-May period, but will be allowed to move things along in the interior of the transmitter building which already exists, making room for all three stations in the one structure. They each get six months from 3/23/06 with reporting conditions on their progress.

Entertainment Media Business Report TM

Crutchfield pitching HD to Hispanics
Want more choices in Spanish radio? Crutchfield has launched a marketing campaign to tell US Hispanics that implementation of HD Digital Radio has spawned an explosion of new Hispanic-oriented radio channels. The electronics retailer notes that may English-language radio stations are now offering HD2 channels broadcasting in Spanish. Of course, to listen you need an HD2-capable receiver - and Crutchfield stand ready to sell you one. According to Crutchfield, "the introduction of HD Radio has not only increased the quantity of Hispanic content available, but also the depth and quality. Classic Latino music stations are being joined by stations that play Romantica (KISQ 98.1-2, San Francisco), Tejano (KWID, 101.9-2, Las Vegas) Hispanic Talk, (KLLI 105.3-2, Dallas-Fort Worth), Spanish Oldies (KMGG, 95.7-2, Denver-Boulder), and Spanish Hits (KIZS, 101.5-2, Tulsa), to name a few -- many of which would not have been possible absent the additional frequencies afforded by HD. In some cities, there is almost the same amount of formats available in Spanish as there is in English."

Ratings & Research

All the news that's fit to ignore
It would appear that rather than floating all boats, citizen apathy is sinking all boats when it comes to getting the news. Just about every conceivable category is down in the latest report from the Pew Research Center for the People and the Press. And the two categories that are up haven't increased at a level which indicates they're snagging customers from the losers. Comparing regular news watchers from 2004 to 2006, local TV is down 5% to 54%, cable TV is down 4% to 34%, and nightly network news is down 6% to 28%. Only the network morning news shows registered a gain, a modest 1% increase to 23%. Using the standard "listened/read yesterday," Pew recorded a 4% decline in radio to 36% and a 2% drop in newspaper, to 40%. Online news managed a 2% gain to 31%, an indication that it is starting to plateau after going from 2% to 23% between 1996 and 2000. However, online readers helped cut the loss for newspapers, which received an extra 2% credit from web-only readers. 4% of the newspaper audience uses both print and online versions. TV is the top medium among both news junkies, who average 89 minutes, and those who check in from time to time, who average 44 minutes. Regular news users outnumber the occasional drop-ins in all categories except one, online. 25% of the latter head there for news, as opposed to only 21% of the more hard core news users.

Transactions

4.9M WNYQ-FM Albany-Schenectady-Troy (Malta NY) from Vox New York LLC (Bruce G. Danziger) to Regent Licensee of Mansfield Inc., a subsidiary of Regent Communications Inc. (William L. Stakelin). 490K escrow, balance in cash at closing. Superduopoly with WTMM-AM, WABT-FM, WGNA-FM, WQBK-FM, WQBJ-FM. Provides for optional LMA. [File date 7/13/06.]

3.25M WITH-AM Baltimore MD from Caron Broadcasting Inc., a subsidiary of Salem Communications Corporation (Stuart W. Epperson, Edward G. Atsinger III) to Peter and John Radio Fellowship Inc. (John Thomas Bisset et al). 162.5K escrow, balance in cash at closing. Combo with WRBS-FM. Buyer is noncommercial. [File date 7/13/06.]

Stock Talk

Inflation worries sink stocks
A government report indicating that inflation is still significant raised fears of another Fed rate hike and sent stock prices lower. The Dow Industrials fell 60 points, or 0.5%, to 11,126.

Most radio stocks joined the retreat. The Radio Index fell 1.535, or 1.1%, to 140.635. Beasley was hardest hit, down 7.7%. Radio One (Class D) was down 2.4%.

Radio Stocks

**Here's how stocks fared on Tuesday**
Company	Symbol	Close		Change	Company	Symbol	Close		Change
Arbitron	ARB		36.30	-0.31	Hearst-Argyle	HTV		20.08	+0.08
Beasley	BBGI		6.51	-0.54	Journal Comm.	JRN		10.47	-0.08
CBS CI. B	CBS		26.83	-0.60	Lincoln Natl.	LNC		56.49	-0.19
CBS CI. A	CBSa		26.85	-0.53	Radio One, Cl. A	ROIA		6.99	-0.16
Citadel	CDL		9.34	+0.07	Radio One, Cl. D	ROIAK		7.01	-0.17
Clear Channel	CCU		28.95	unch	Regent	RGCI		3.94	-0.08
Cox Radio	CXR		14.41	-0.24	Saga Commun.	SGA		7.58	-0.02
Cumulus	CMLS		9.43	-0.07	Salem Comm.	SALM		12.08	-0.05
Disney	DIS		29.35	-0.34	Sirius Sat. Radio	SIRI		4.08	-0.12
Emmis	EMMS		14.78	-0.04	Spanish Bcg.	SBSA		4.73	+0.12
Entercom	ETM		24.78	-0.57	Univision	UVN		33.47	+0.07
Entravision	EVC		7.60	-0.18	Westwood One	WON		6.67	+0.01
Fisher	FSCI		40.24	-0.25	XM Sat. Radio	XMSR		12.19	+0.59
Gaylord	GET		37.22	-1.00	-	-	-	-	-

Bounceback

Send Us Your Opinions We want to
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Below the Fold

Wall Street Media Business Report
Sirius by the numbers
Both satellite radio companies continue to burn through money...

Sales & Marketing Business Report
New electronic buying systems
Pt 3, Kathy Crawford, MindShare Auction model is not the answer to our commerce...

Ad Business Report
Event marketing leads NTR
May be approaching the point where the 'Non-' is gone...

Media Business Report
Newspaper companies settle
Internet stakes, Gannett and Trib will each increase their stake...

Media Markets & Money
Close encounter in Plattsburgh
Hall Communications has completed its deal...

Washington Media Business Report
For whom the FCC tolls
It tolls for the blue-spotted salamander...

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

Cumulus promotion
Spike Santee has been promoted to Regional Vice President at Cumulus Media for the southwest region, overseeing operations at 64 radio stations in 13 markets across Louisiana, Arkansas, Texas, Colorado, Oregon and California. Santee joined Cumulus in 2001 as Director of the Cumulus Club, a new business development project.

iBiquity auto
team grows
Expanding its efforts to promote OEM sales of HD Radio receivers, iBiquity Digital's automotive group has hired Gereon Joachim as senior manager OEM business development based in Cologne, Germany, to head iBiquity's efforts with European automakers. iBiquity also added Richard Zeichner as manager for dealer programs and Erin Burns as a sales engineer to its Pontiac, MI staff.

More News Headlines

XM expands
traffic channels
Expanding in the one area where it can go head-to-head with local radio, XM Satellite Radio announced that its XM NavTraffic will launch in 13 more markets in Q3, bring the total to 44 markets. The new markets to launch: Austin, TX; Buffalo - Niagara Falls, NY; Charlotte, NC; Columbus, OH; Hartford - New Britain - Middletown, CT; Indianapolis, IN; Kansas City, KS; Las Vegas, NV; Memphis, TN; Nashville, TN; Norfolk - Virginia Beach/Newport News, VA; Sarasota - Bradenton, FL; and West Palm Beach - Boca Raton, FL. XM NavTraffic delivers real-time traffic information to vehicle navigation systems. The driver can see current traffic conditions on the nav screen, such as traffic speeds, accident locations, and road closings. The service, which requires special equipment, costs and extra 3.99 per month on top of the regular XM subscription of 12.95.

RBR Radar 2006

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

Clear Channel stock:
Wall Street darling or dog?
Jim Boyle, at CL King, has issued a sell call for the stock of Clear Channel Communications, Marci Ryvicker back at Wachovia Securities has reiterated her view that Clear Channel is a buy. Victor Miller at Bear Stearns is also out with a note tapping Clear Channel as his top pick in radio.

RBR observation: So who is correct in darling or dog? Depends on your view of the company management as these executives will set the course on darling or dog. That is what the Wall Street guru's do not say. Companies are not bad just some that run them. So judge the executives on your decision as this goes for all companies not just Clear Channel.
08/01/06 RBR #148

RBR observation:
Thank you CBS
The move by CBS to take the FCC to court over its fine for Janet Jackson's Super Bowl flash should be welcomed by everyone in broadcasting, from shock-jocks to conservative Religious stations. At long last licensees are going to get a clear definition of what does or does not constitute indecency - and whether the law that prohibits the broadcasting of indecent material between 6:00 am and 10:00 pm is constitutional.
08/01/06 RBR #148

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.

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."
7/31/06 RBR #147

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. I have been pitched pretty much all of the electronic media systems out there and they fall into essentially two categories, online auctions and then there is the full blown systems.
7/31/06 RBR #147

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.
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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