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Volume 22, Issue 151, Jim Carnegie, Editor & Publisher

Wednesday Morning August 3rd, 2005

Radio News®

Sirius raises expectations
In yesterday's quarterly conference call of Sirius Satellite Radio, Mel Karmazin was sounding just like the Zen Master from his Infinity days, crowing about his company's rapid growth and predicting great things ahead. After beating Q2 expectations, Mel Karmazin has raised the subscriber goal for Sirius Satellite Radio to three million by year-end - - the third time this year that Sirius has raised its subscriber estimate. Karmazin also expects to be free cash flow positive for all of 2007 - - maybe even in Q4 of 2006. Sirius is also preparing to put some more cash in its coffers. It is filing with the SEC to sell 400 million in new senior notes which will be due in 2013. although Sirius has been paying heavily to acquire exclusive programming, such as Howard Stern, Karmazin insists that there is no other must have piece, so Sirius is now shopping only for programming to round out its current offerings at reasonable prices.

Alarcon defends move into TV
Spanish Broadcasting System took a hit on Wall Street last month after announcing its first move into television with a 37.5 million bucks buy of WDLP-TV Miami (7/14/05 RBR #137), but CEO Raul Alarcon defended the move in his quarterly conference call and said SBS would be vindicated by showing how valuable the TV station will be for cross-promotion - - something several other players in Spanish media are already able to do.

In answer to an analyst's question, Alarcon also denied that he had decided to get into TV because multiples aren't attractive in radio.

Alarcon left unanswered a related question from the same analyst - - is SBS looking to make other TV acquisitions? Meanwhile, Alarcon expressed confidence that Styles Media will be able to make its delayed closing on two of SBS' Los Angeles stations for 120 million. Asked if he'd considered just keeping the 20 million non-refundable deposit and remarketing the stations after Styles couldn't close on time, Alarcon said it would not have been in his company's best interest to blow up the deal. He confirmed that he tried, and failed, to get Styles to pay extra because of the delay, but said "there are just so many screws you can put to a buyer at one time." As reported (8/2/05 RBR #150), Styles has to up its deposit to a total of 55 million to get to a closing date now set for the end of January.

Video game takes the 2005 indecency heat
Broadcasters have yet to receive any new fines for indecency this year, and further are generating very few protests. However, perhaps proving yet again that nature abhors a vacuum, a new candidate has filled the void, giving indecency foes something to attack. Introducing: "Grand Theft Auto: San Andreas." [Warning: groaningly, achingly obvious pun dead ahead.] And just what is the San Andreas fault? [Don't say we didn't warn you.] It was released with a rating of M, meaning for a mature, aged-17-or-older clientele, and avoiding an Adults Only rating. However, the possibility of unlocking indecent - - some say pornographic - - material was built into the game, drawing howls of protest and inspiring the Entertainment Software Rating Board to launch an investigation. The game drew the ire of the Parents Television Council and Grassfire.org, both of which kicked their well-oiled Internet protest machines into gear. And the House of Representatives has ordered the Federal Trade Commission to look into the situation by a vote of 355-21. On the Senate side, Hillary Rodham Clinton (D-NY) has been taking a lead role in the anti-Grand Theft campaign. It's also been pulled from the shelves of leading retailers.

RBR observation: Isn't it nice to have someone else getting the tar and feathers for a change?

Radiosophy announces low-priced HD multicast receiver
Radiosophy announced new retail pricing for its MultiStream HD receiver. The new 269-dollar retail pricing is effective today. Radiosophy will continue taking pre-orders for the MultiStream HD, which is expected to begin shipping in September. Radiosophy will honor all previous sale prices on orders placed prior to the announcement. "Our manufacturing costs have increased but we will be the HD Radio price leader," stated Radiosophy President/CEO Richard Skeie. "Despite the small price increase, at 269 the MultiStream HD is still about half the price of the other tabletop HD Radio receivers."

Political category heating up
Congress is in recess and the President is headed for Crawford TX, and many others in Washington are headed out of town during the month of August, a time where the nation's capital reverts to its sleepy pre-WWII status. But a Supreme Court candidate and a possible 2008 presidential candidate are fueling cash infusions into the political ad category. The nomination of John Roberts to take over Sandra Day O'Connor's seat on the Supreme Court bench made a surprisingly small initial splash, but the water is slowly starting to churn as more of Roberts' background is ferreted out. Liberal watchdogs which had been content to hold their fire are now trotting out advertisements encouraging Democratic senators to be aggressive during the confirmation process. Conservative groups are expected to fire right back, and at least one of them is going to focus on the home states of Democratic Senate Judiciary Committee members up for re-election in 2006, particularly if they're from a battleground state. Meanwhile, according to the Associated Press, a group called Hillary Now, which is not affiliated with Hillary Rodham Clinton, is nevertheless buying time on cable systems in New Hampshire to push her prospects for a 2008 presidential run. It's a very limited campaign, though - - the group is getting time on cable news channels between 1AM-5AM.

Broadcasters' Foundation to honor Smulyan
Emmis Communications founder and CEO Jeff Smulyan will be honored with the 2006 Broadcaster's Foundation Golden Mike Award. "The fact that in 2005 Emmis was named by Fortune as one of the '100 Best Companies to Work For,' is just one example of why Jeff is so worthy of this honor," said Phil Lombardo, chair of the Foundation and CEO of Citadel Communications. The award will be presented to Smulyan at a black tie dinner February 27th in New York.

Conference Calls Q2 2005

Double digit growth for SBS
Broadcasters targeting Hispanics continue to outpace their general market brethren. Spanish Broadcasting System reported that Q2 net revenues were up 11% to 44.6 million. That's actually less impressive than some other recent quarters. CEO Raul Alarcon told analysts that Q2 revenues were hold down by the format change at KXOL-FM Los Angeles and he noted weakness in network ad revenues. That was attributed in large part to an advertising cutback by Telemundo. Operating income rose 3% in the quarter to 15.5 million, with same station operating income up 9%.

Sirius by the numbers
Subscriber numbers and revenues may be running ahead of expectations, but they're still using plenty of red ink to print the quarterly reports at Sirius Satellite Radio. Q2 revenues gained 295% to 52.2 million from only 13.2 million a year ago. But expenses also rose sharply. Programming and content expenses were 16.1 million, up 5.7 million from 10.4 million a year ago. Engineering, design and development costs rose 5.9 million to 11.8 million from 5.9 million. Customer service and billing expenses rose 3.2 million to 7.7 million from 4.5 million a year ago. So, on the bottom line, Sirius' net loss grew to 177.5 million, or 13 cents per share, from 136.8 million, or 11 cents per share in Q2 of 2004.

Adbiz©

Donlin: GM Planworks to announce
new appointments soon; national
staying in NYC
GM Planworks CEO/President Dennis Donlin tells RBR/TVBR that after Starcom officially gets GM's buying from GM Mediaworks come 10/1, all national broadcast buying will be staying in NYC. Some had speculated it would move to Chicago or Detroit. We hear Mediaworks' Michael Rosen and his team including Suzanne Irving will be staying on board there as well.

On the spot side, says Donlin, "We are in the process of making announcements about staffing and structure in the spot area. Kevin Gallagher is running our spot broadcast buying operation out of Chicago-the macro organization. And he's announcing staff and hiring people as we speak." Spot offices will be in NYC, Chicago, Atlanta and Dallas. "So exactly who the people are that will be running those organizations, right now the focus is on LCI. And LCI is making the fourth quarter buys. We have not yet announced who is going to be in each of the spot buying organizations. It will be announced shortly." Be sure to read our OneOnOne interview with Dennis in our August print issue, mailing now.

Brian Elwarner named
GM Planworks SVP
One of those examples Donlin spoke of above is media director Brian Elwarner has been upped to a senior vice president of the agency, based in Detroit. Elwarner is responsible for leading the development of media campaigns and integrated sponsorships that capitalize on Planworks' proprietary strategic resources, in order to plan and execute GM advertising communications. Elwarner, 40, has been with GM Planworks since its inception in 2000. Upon joining the agency as a director, he was integral to building agency talent through recruitment efforts. Growing alongside Planworks, he has worked on such accounts as Hummer H2, the Cadillac CTS launch and Escalade. Over the years, he has lent his widely varied automotive marketing experience to some of Planworks most celebrated campaigns. Prior to Planworks, Elwarner broadened his automotive marketing experience as a media supervisor for Cadillac at D'Arcy Masius Benton & Bowles, where he polished his planning skills by working on the Cadillac Motor Division.

ZenithOptimedia:
ad spend slowing faster than expected
Ad spend around the world is slowing down much faster than expected, says a report by ZenithOptimedia. Advertising for 2005 will rise by just 4.7% around the world, much slower than the 5.4% pace predicted in a previous forecast. Europe is getting hit the hardest, the report says, due to weak economic growth outlooks among EU nations. The report says the European market will see spend rise by just 3.4%, down from the previous forecast of 4.4%.

New drug ad guidelines adopted
New ad guidelines being adopted by the pharmaceutical industry will include a requirement that televised commercials clearly present drug risks and promote conversations with doctors. The new industry code guidelines say that to foster communication between patients and health care professionals, companies should spend an "appropriate time to educate health professionals" about new treatments before beginning DTC campaigns. It also said ads should be targeted to avoid audiences that are not age-appropriate for the spot. The guidelines also say that companies should submit all new TV ads to the FDA for review before they air.

Radio & Television Business Report

Radio's Important September Face Off
UpFront 2005 - will radio face the mild reception as Network TV? Top media agency buyers and network radio sellers participating so far: Kelly Cadotte, Natalie Swed Stone, ,Irene Katsnelson, Chris Fontana, Rich Russo, Matt Feinberg, Matthew Warnecke, Kim Vasey, and Lisa Opensky Greenberg.

And we go One on One with Charles Courtier, Executive Chairman of Mediaedge:cia

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Media Markets & MoneyTM

PAR finds out what's Cookin' in Appomattox
The Baker family's noncommercial Positive Alternative Radio has struck again. This time they're picking up WTTX-FM in Appomattox VA. Besides being near the site of Lee's 1865 surrender to Grant, ending the Civil War, it is also about 15 miles east of the eastern, or Lynchburg side of the Roanoke-Lynchburg Arbitron market. The seller, Terry Cook's CLL Inc., will get 1.8M in time, with the bulk - - 1.3M to be exact - - coming pursuant to terms of a promissory note. Vernon, Virginia and Edward Baker run one of the nation's more unique groups - - two groups, really. Both comprise a collection of radio stations in small mid-Atlantic markets, one of which is commercial and one of which is not.

Close encounter in the mid-Atlantic
Dan Savadove's Main Line Broadcasting has accepted the keys to an intact superduopoloy cluster in the Hagerstown MD-Chambersburg-Waynesboro PA Arbitron market. According to broker Michael Bergner, WIKZ-FM, WQCM-FM, WDLD-FM, WHAG-AM and WCHA-AM fetched a price of 22.5M for seller Dame Broadcasting.

Consolidation enablers
consolidate themselves
How many related brokerages are allowed to operate in one market? Well, the market is the entire USA, and as far as we know the FCC has not gotten around to regulated brokerage houses, and even if it did, Private Media Brokerage Group (PMBG) would look more like an LMA than a co-owned group, anyway. The new consortium has been set up by five separate firms to "allow collaboration between them in order to expedite the sale of listed properties." Participating in PMBG are Cox & Cox, Gammon Media Brokers, Kozacko Media Services, Satterfield & Perry and Clifton Gardiner & Company. Although the ownership of each brokerage will be unaffected, the consortium will "...allow the member firms to exchange information on radio and television stations acquisitions and divestitures." Calling the arrangement a win-win for buyers and sellers alike, founding member Dick Kozacko noted that the combined brokerage houses will be able to bring a vastly increased pool of both to the table.

Washington Beat

Petition to deny denied,
fines levied anyway
A disputed stock deal involving KCWY-TV Casper WY has been cleared for takeoff. Uhlman/Latshaw Broadcasting (ULB) was the permittee back in 1998 when the deal was first filed. It gave Bozeman Trail Communications Company (BTC) and its parent, Sunbelt Communications Company, 49% of the permit, an option to acquire the remaining 51%, and an LMA to handle many of the station's operations. Max Media of Montana filed to deny the deal on grounds that it constituted an unauthorized transfer of control, among other things, but was found to lack standing to so much as make the filing. In the end, the FCC found that there were no problems with the deal. There were problems, though. When ULB and BTC filed the deal back in 1998, they failed to include the Stock Purchase Agreement, a violation of the rules. Pricetag for the fine: 3K. They also failed to include the document in their ownership reports. Ring up another 3K. They further failed to put a copy in the public inspection files. That's another 10K, for a 16K total.

RBR observation: Wow. The dealing is squeaky clean but the filing is 16K worth of dirty. We're always going through applications in the FCC deal database, and it's highly annoying when the required contracts are not included with the application. So you can be fined for not appending that information? Generally when this happens we try to contact one or both of the lawyers listed on the app to inform them of the oversight - - it's usually an unintentional electronic filing error. But if it could cost you 3K for the FCC to catch the error, we'd strongly recommend calling up your own documents to make sure they made it into the public record properly.

TVBR - TV News

Nexstar sees 2005 down, upbeat on 2006
After reporting that Q2 revenues were down 5.4% to 57.9 million, Nexstar is telling Wall Street to expect full year 2005 revenues to be down in the high single digits, due to the lack of political revenues and softness in the auto sector. CEO

Perry Sook told analysts that Nexstar's stations booked three million in new local direct business in Q2 - - tying the company record - - which held the revenue decline, not including political, to 1%. Sook said there was a "spate" of auto business cancellations in June, and although some of that business was just moved to July, it's made him cautious about projecting where the auto sector is going. Meanwhile, Sook is upbeat about 2006, where his stations are already marketing the Super Bowl and the Olympics - - not to mention another round of elections. Also, he notes, his 13 NBC affiliates are going to again have NFL football to sell. Sook said there was nothing new to report regarding the Cox and Cable One systems which are not carrying Nexstar's stations on cable due to a retransmission consent dispute - - except, he says, those markets are becoming more normal each week for Nexstar's ad sales. However, Sook said Nexstar is having "more constructive conversations" with other top 10 MSOs whose retransmission consent agreements with Nexstar will expire in a few months. He said those talks began with a clear understanding by the MSOs that Nexstar would insist on cash compensation.

Transactions

900K KITO AM & FM Vinita OK from DLB Broadcasting Corporation (David L. Boyd) to Mid America AG Network Inc. (Larry Steckline, Gregory R. Steckline). 50K escrow, 350K cash at closing, 500K note. [File date 6/27/05.]

123.5K WFLN-AM Arcadia FL. 51% of Integrity Radio of Florida LLC from Austin Isherwood (49% to 0%) and Roy E. Kalman (2% to 0%) to George S. Kalman (49% to 100%). Cash. Includes non-compete. 119K to Isherwood, 4.5K to R.E.Kalman. [File date 6/27/05.]

Stock Talk

Consumer spending cheers Wall Street
A government report which showed consumer spending up 0.8% in June put traders in a buying mood. The Dow Industrials rose 61 points, or 0.6%, to 10,684.

Radio stocks also got a boost. The Radio Index rose 2.334, or 1.1%, to 211.650. Regent led the field, gaining 4.9%. Saga was up 4.1%. But the quarterly conference call and data from Spanish Broadcasting System were not well received. SBS fell 4.5%.

Radio Stocks

**Here's how stocks fared on Tuesday**
Company	Symbol	Close		Change	Company	Symbol	Close		Change
Arbitron	ARB		41.60	-0.06	Jeff-Pilot	JP		50.28	+0.09
Beasley	BBGI		13.72	unch	Journal Comm.	JRN		16.13	+0.11
Citadel	CDL		12.87	+0.16	Radio One, Cl. A	ROIA		13.50	+0.15
Clear Channel	CCU		33.60	+0.93	Radio One, Cl. D	ROIAK		13.57	+0.16
Cox Radio	CXR		16.26	+0.43	Regent	RGCI		6.23	+0.29
Cumulus	CMLS		13.05	+0.11	Saga Commun.	SGA		15.50	+0.61
Disney	DIS		25.56	-0.05	Salem Comm.	SALM		21.00	+0.50
Emmis	EMMS		21.70	+0.27	Sirius Sat. Radio	SIRI		6.75	-0.20
Entercom	ETM		32.09	+0.33	Spanish Bcg.	SBSA		8.25	-0.39
Entravision	EVC		8.73	-0.06	Univision	UVN		28.28	-0.13
Fisher	FSCI		47.00	+0.78	Viacom, Cl. A	VIA		33.89	+0.48
Gaylord	GET		46.70	-1.05	Viacom, Cl. B	VIAb		33.76	+0.60
Hearst-Argyle	HTV		24.86	-0.02	Westwood One	WON		20.14	-0.09
Interep	IREP		0.68	unch	XM Sat. Radio	XMSR		34.44	-0.97
International Bcg.	IBCS		0.01	unch	-	-	-	-	-

Bounceback

Send Us Your Opinions We want to
hear from you.
This is your column, so send your comments to [email protected]

As many of you are hopefully aware, the FCC is taking comments on proposed rule changes for LPFM which would have potentially serious effects on currently licensed FM translators, as well as current FM translator construction permits and pending applications. The docket is 99-25 and the deadline for comment is August 8. One of the original March 2005 petitioners who requested the current freeze on the granting of translator licenses, REC Networks, has apparently filed their comments to the pending rulemaking and have posted those comments on their website at www.recnet.com/fcc Part of their recommendations to the FCC is to protect from LPFM ONLY translators that they have listed as "legacy" translators and have defined those as FM translators that meet the following criteria:

| More... |

Ted Austin
Licensee of KCHQ-FM
Driggs, Idaho

Arbitrends

Upped & Tapped

Leathers knows the
way to San Jose
Former Bonneville San Francisco Sr. GSM John Leathers has joined NextMedia to be General Manager for its new acquisitions in the San Jose market, KEZR-FM & KBAY-FM.

Interep looks overseas
Interep announced that it has added Terry Bate to its board of directors. Back in 1973 Bates founded Broadcast Marketing Services Ltd., which during the 1970s and '80s was the largest radio sales an marketing company in the UK. He is currently a director a major shareholder for Malta-based Multiplus Ltd., billed as "the first international digital terrestrial television operation in Europe."

New add at
Entercom HQ
Entercom Communications has named Jen Gordon Director of Corporate Communications, a new position within the company. She joins Entercom after spending 11 years in account management, most recently as an Account Director at Red Tettemer Advertising in Philadelphia.

Stations for Sale

Santa Fe Market #237
New market FM entrant ready to go! Santa Fe is a unique and rich market with a great opportunity for an aggressive, innovative operator!
Cliff at Clifton Gardiner & Co
(303)758-6900
[email protected]

More News Headlines

Mancow may move to Infinity in Chicago
If all goes as planned 9/22 could be a monumental day for Chicago radio and for at least two of the market's all-time biggest morning stars, according to the Sun-Times' Robert Feder: "Negotiations are under way at the highest levels of Infinity Broadcasting and Emmis Communications to move Mancow Muller from Emmis' alternative WKQX-FM to Infinity's talk WCKG-FM, where he would replace Howard Stern. Muller's move would pave the way for Jonathon Brandmeier to join Emmis' classic rock WLUP-FM and return to the Loop morning slot where he enjoyed his greatest success in the 1980s and early '90s." Sources told Feder that Brandmeier would agree to the deal only if Muller were working elsewhere. Muller still has one year to go on his Emmis contract. Infinity would assume terms of the deal, according to the plan. Sources emphasized that no agreements have been reached with either personality, and money remains a big question. Both moves are targeted for 9/22, which marks the start of Arbitron's fall ratings period.

Da ‘King of All Media’
Yep, ‘The Howard’ Stern but not totally confirmed has said to have inked a deal with Demand to carry the TV edition of his soon to be show on Sirius. It is heard to be the raunchy version instead of the watered down version which runs on E!

Russia kicks out
ABC News
Russia's foreign ministry says it will not renew its authorization for ABC News to operate in the country because of the US network's recent broadcast of an interview with the head of a Chechen rebel group. Shamil Basayev, a leading Chechen warlord, is regarded as a terrorist by the Russian government. ABC's "Nightline" aired the interview despite Russian objections. The foreign ministry then made a formal protest to a top US diplomat in Moscow. That was followed by the Russian defense minister barring his country's military personnel from having any contact with ABC reporters. Now the foreign ministry says the credentials of ABC's reporters and other staffers in Russia will not be renewed as they expire. So far, the US government is standing behind ABC, with the State Department saying that ABC News and all other media outlets should have the right to report as they see fit.

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RBR Radar 2005

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

WMAL puts Graham on ice
President/GM Chris Berry, said that Talker Michael Graham crossed the line when he suggested all Muslims are terrorists on his show Monday 7/27/05. "We do not condone his position and believe his statements were irresponsible." Graham hinted on his website that the action came down to the station from corporate. "My radio station, 630 WMAL, has publicly announced that I've been suspended by ABC (no doubt Ted Koppel and Peter Jennings are thrilled) and I am 'under investigation' for my discussion on Islam and the tragedy of its current links to terror. What exactly is I'm being 'investigated' over, I have no idea. After all, everything I do, I do on the air in front of thousands of people. What's to investigate?"
RBR observation: Chris Berry took the proper course of action no matter what today's tense environment is with world issues at hand. There is no place in the business of radio, TV, or any media for this type of action and putting the license care taker in harms way. Michael Graham while on vacation we suggest a career change like enrolling in an 18 wheeler truck driving school. 08/02/05 RBR #150

Gatorade comes in first
at MLB All-Star game
One way to get your product's image before a big audience is to put that image somewhere where there are likely to be TV cameras. Such a place was Comerica Park in Detroit, site of this year's Major League Baseball All-Star game. Counting in-stadium and superimposed images, Gatorade led all comers when it came to making a lot of impressions.
RBR observation: It is called spending advertising dollars on 'Product Placement'.
08/02/05 RBR #150

RBR Observation
Readers reject Burns bill
The NAB may be supporting federal regulation of TV ratings, but RBR didn't find much support for the idea among rank-and-file broadcasters. Lots of words tossed around and name calling but in short the business of audience measurement and both commercial mediums must move forward. The phone calls and emails RBR received would never pass FCC guidelines as mother is only one-half of a word. So our observation and advice is for Nielsen chiefs and Broadcasting chiefs including NAB -TV Executive committee members, sit down and talk face to face. Break out the ham salad sandwiches and cream sodas. RBR will supply the ice packs for cooler heads or to position any place you like. Just start talking face to face. 08/01/05 RBR #149

General Manager

Saga Communications Brad Eure retires and we seek his replacement with a radio professional that has passion and commitment to the radio business to take the leadership at WWWV / WQMZ & WINA Charlottesville, VA. Saga, we believe in our people. Interested then tell us about yourself.

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