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Volume 22, Issue 157, Jim Carnegie, Editor & Publisher

Thursday Morning August 11th, 2005

Radio News®

Clear Channel files 350M IPO
for Outdoor; Entertainment spin
The pieces are being put in place for the massive restructuring that Clear Channel Communications plans to complete by the end of this year (8/10/05 RBR #156). It's now filed with the SEC for a 350 million IPO of Clear Channel Outdoor and a spin-off to shareholders of Clear Channel Entertainment. Since CCU has said it will be selling only 10% of the billboard company to the public, simple math shows that the company's stock is being valued at 3.5 billion. It will also owe 2.5 billion to parent company, although that will be reduced somewhat with proceeds from the public stock sale. CCU will continue to be the controlling shareholder of CC Outdoor and its stock will have super voting rights - - 20 times that of the stock being sold to the public. The IPO filing reveals that CCU CEO Mark Mays will also be CEO of CC Outdoor and Randall Mays will be CFO of both companies. CCU Chairman Lowry Mays will be a CCO director. Day-to-day operations will be run by Paul Meyer, who just signed a new contract to be contract to be President and COO of CCO with a base salary of 600K per year. For the full year 2004, CCO generated revenues of approximately 2.4 billion, operating income of approximately 243.3 million and operating income before depreciation, amortization and non-cash compensation expense (OIBDAN, a favorite CCU metric) of approximately 631.6 million. The underwriters for the IPO have not yet been named, but you can bet that the list will read like a who's who of Wall Street firms who deal in the media sector. Not much new was disclosed in the CC Entertainment spin-off filing. Randall Mays will serve as Chairman and interim CEO, with both Mark and Lowry as directors.

RBR observation: Shame on the Mays boys. One of the things that we've always admired about Clear Channel Communications is that it has no disproportionate voting scheme for its stock. If you call your broker today and buy a share of CCU stock, it will have exactly the same voting power as the shares owned by Lowry Mays - - he just has a lot more of them. But the Mays family doesn't have voting control and could, in theory, be tossed out if other shareholders don't approve of how they're running the company. There doesn't seem to be any point to creating Class B stock for CC Outdoor. Even without the super-voting stock, CCU would still own 90% of the spin-off and it would take a lot of add-on stock sales over many, many years to dilute that to less than 51%.

Three fired at
KNBR-AM San Francisco
The suspension of Sports/Talk host Larry Krueger from Susquehanna's KNBR-AM San Francisco (8/8/05 RBR #154) has turned into a pink slip. Not only that, but two other staffers have also been fired because of bits that aired on the station's morning show after Krueger's suspension. According to the San Francisco Chronicle, those bits incorporated Satan references from Comedy Central's "South Park" to parody comments made by San Francisco Giants manager Felipe Alou on ESPN after he had refused to accept Krueger's apology for an on-air ethnic slur against Giants players from the Caribbean. Alou himself is a native of the Dominican Republic. In addition to making Krueger's exit from the air permanent, Susquehanna Market Manager Tony Salvadore also fired KNBR Program Manager Bob Agnew and "Morning Show" producer Tony Rhein. Here is the statement that was posted on the KNBR website. | More... |

Don't believe everything you read
After reading in another radio trade publication that Disney CFO Tom Staggs said in Tuesday's conference call that the ABC Radio Networks would not be included in any potential sale of ABC Radio, we went back and checked the tape. That is not true and what we reported yesterday (8/10/05 RBR #156) is correct - - only Radio Disney and ESPN Radio are excluded. His exact words: "We do not anticipate that the Radio Disney network and stations or the ESPN Radio Network would be part of the possible deal. Excluding these assets, ABC Radio generated 203 million dollars in operating income in fiscal 2004."

RBR observation: Yep we read all various trade publications not to correct them but to learn because if you don’t read the trade journals and business reports vital to your own business and career you are committed to failure. Facts are important. Now go figure which radio trade made the boo-boo.

Time Warner in Icahn's sights?
Just when it looked like things were settling down at Time Warner and the company was putting the AOL merger fiasco behind it, there's now Carl Icahn to deal with. The corporate raider Carl Icahn is girding for a battle with Time Warner management, according to the Wall Street Journal. Icahn owns a sizeable chunk of T-W stock, but would need support from lots of other big holders to pull this off. He reportedly wants to push the company to sell off its magazines and a lot more than is planned of its cable TV unit. T-W, which recently sold an IPO of its record unit, is already planning to sell 15% of its cable MSO in an IPO. But Icahn is said to want much more - - perhaps a complete sale of cable - - and for Time Warner to sell off its magazine business. There's no word on whether he would want Time dropped from the company name if the magazine is sold.

SBS' new TV freed
from closed captioning
Acting on a petition from current owner WDLP Broadcasting, the FCC has granted a waiver from closed captioning requirements to WSBS-TV (Ch. 22) Key West and low power repeater WDLP-CA (Ch.21) Pompano Beach, FL, both in the Miami market. The action, which was opposed by four advocacy groups for the deaf and hard of hearing, comes as a 37.5 million sale of the stations to Spanish Broadcasting System is pending (7/14/05 RBR #137). In fact, the call letters have already been changed to WSBS (from WDLP-TV) and the cost of the change from infomercials to Spanish programming in 2003 was cited as a financial hardship to justify the waiver and WDLP provided the FCC with financial documentation of a two million loss for the most recent six months. It also claimed that because it broadcasts in Spanish, it would be difficult to find people qualified to perform Spanish language program captioning. As a result of the waiver being granted, WSBS/WDLP won't have to do any closed captioning for the next three years.

RBR observation: It's hard to find people who can do closed captioning in Spanish in the Miami area? And the FCC bought into that ridiculous claim? Who are they trying to fool?

Fined stations urge viewers to contact the FCC
The owners of WBBH-TV and WZVN-TV Ft. Myers-Naples haven't said yet whether they'll fight 48,000 in fines by the FCC for not providing three on-air warnings in text for the hearing impaired over the course of eight days of continuous hurricane coverage last year (8/10/05 RBR #156), but they're not taking the action lying down. Both stations are urging viewers to contact the FCC and they've provided email addresses for seven officials of the Enforcement Bureau on their station websites. "The news of the fines had a depressing effect on our news organization. The news staff was really bummed out about the [FCC] decision, but we've gotten them pumped back up so that they realize that they are doing a good job. I'm very proud of them. I'll follow them into battle anywhere," Executive Vice President Steve Pontius told RBR/TVBR. Waterman owns WBBH (NBC) and LMAs WZVN (ABC). Since the two stations have 30 days to respond to the FCC's notice of apparent liability, Pontius said he is still exploring his options.

RBR observation: They're not precisely the same thing, but isn't it ironic that just a day later the same FCC that had fined the Ft. Myers-Naples stations gave a waiver of program closed captioning to a station in nearby Miami - - also in prime hurricane territory? We watched a good bit of the WBBH/WZVN coverage via the Internet a year ago. They should be winning awards, not being hit with fines.

Conference Calls Q2 2005

News Corp posts double-digit year
Film and cable were the heroes as News Corporation reported a 15% gain in revenues for its fiscal year to 23.9 billion, with operating income up 22% to 3.6 billion. CFO David DeVoe told analysts to expect operating income to be up in the mid-teens for the next year. For fiscal Q4, TV operating income was down seven million to 344 million. Operating income for the O&O TV stations declined 5% in fiscal Q4 "as softness in the overall advertising market and the negative impact of Local People Meters more than offset the success of local morning newscasts." Operating income for the Fox Network was down for both the quarter and the year, although no details were offered.

Adbiz©

GM Planworks names
local buying office execs
As GM Planworks CEO Denis Donlin foretold last week (8/3 TVBR #151), the company is now announcing appointments to its local buying offices. GM Planworks will welcome Kathy McCauley as an SVP/managing director in mid-August, responsible for all local broadcast investment activities on behalf of the sole client. McCauley will operate out of SMG's Chicago HQ and report to Kevin Gallagher, SVP/local investment director for GM Planworks and sister agency Starcom USA. McCauley, will join the agency from Mindshare Chicago, after 23 years of service.

"Her extensive work in the automotive arena, coupled with her longstanding reputation for superb client service make Kathy a natural fit for our agency," said Donlin. "Her track record for results will help our local investment units hit the ground running, all to the ultimate tactical advantage of our client." Duties in McCauley's newly created role include oversight of local investment activities across six new Planworks units, based in New York, Chicago, LA, Detroit, Dallas and Atlanta. Also new to the agency, Brian Pruitt will support McCauley by managing operations in the GM Planworks Atlanta office. Previously, he has worked for Universal McCann as a local broadcast manager at LCI on behalf of GM, Lowe's Home Improvement, Kohl's Department Stores, Nationwide Insurance and more. The team's new LA office will be directed by Rochelle Navarro, currently a VP/media director at Planworks' downtown Detroit HQ. Since 2001, her GM duties included work on the Cadillac and Hummer Market Planning Groups as well as the national and local media planning for GM Goodwrench and ACDelco. Navarro will reside in LA when she begins her new assignment in late August.

Goodyear in review
After consolidating creative with Arnold Worldwide Boston and buying and planning with MPG New York 5/04, Goodyear is reportedly placing both into review. Joseph Viselli six months ago took over marketing director duties at Goodyear from Christopher Grindem, who has moved to a new post. The company also recently launched a review for a PR agency. Goodyear spent 66 million in media in the U.S. in 2004, according to TNS Media Intelligence.

Army reissues RFP
Maybe it was the Project on Government Oversight's criticisms that caused the move (7/20 RBR #141): The Army has reissued its request for proposals for its ad contract after abruptly canceling a long-running review that left six agencies hanging. It now intends to make the contract a two-year award, starting 9/30. The RFP anticipates spending at 200 million annually for the new contract.

The Weinstein Company signs
Palisades Media Group for buying
The Weinstein Company and Palisades Media Group signed with Palisades Media to oversee all of its buying and planning. Weinstein is the new multimedia company created by Bob and Harvey Weinstein, who co-founded Miramax Films in 1979. The joint announcement was made by Harvey Weinstein and Palisades Media Group Chairman and CEO Roger Schaffner. The agreement marks a new chapter in the long relationship between the Weinsteins and Palisades Media Group, which handled Miramax's account from 1996 until April 2003, and resumed buying and planning for the company in 2004.

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

Entravision buying back bonds
With cash in its coffers and cheaper debt readily available, Entravision is trying to buy back some of its public bonds. It's begun a tender offer of any and all of its 225 million bucks outstanding of 8.125% senior subordinated notes due 2009. Holders are being offered the calculated value on the payment date in late September, plus a 20 bucks per thousand consent payment, for an estimated total of 1,040.63 per 1,000 face value. The tender offer is set to expire September 21st, but the deadline to receive the consent payment is August 22nd.

Washington Beat

Press abuzz about
Rupert's Democrat largess
With News Corporation pushing hard on Capitol Hill for passage of Sen. Conrad Burns (R-MT) bill to regulate TV ratings, stories have begun appearing about how Rupert Murdoch and others at News Corporation, normally seen as allied with Republicans, have become donors to Congressional Democrats. The Wall Street Journal noted this week that many of the lobbyists hired by News Corp. to push the bill have ties to Democrats and that the company's political action committee (PAC) last year gave more money to Democrats than Republicans - - reversing a seven-year trend. The Hill - - a publication for Beltway insiders - - then came out with its own story noting that supporters of the bill have received more than 90K in contributions from the News Corp. PAC.

Programming

WINS-AM getting impressive podcasting traffic
Infinity Broadcasting's WINS-AM NY new podcasting service has received over 4,000 downloads since its launch less than a week ago. Available at 1010wins.com, the station offers 15 different podcasts topics with content ranging from various press briefings of the day's current events to NYC traffic and weather reports to really bizarre but true stories from around the globe. All of the featured podcasts offer new and original content. The top five most requested podcasts are the 1010 WINS Morning Podcast, 1010 WINS Morning Podcast (Spanish version), You Can't Make This Stuff Up, John Montone Audioblog, and WINS Voicemail Of The Week.

WorldVibrations unveils
broadcasting/podcasting appliance
WorldVibrations (www.worldvibrations.com) announced it has integrated podcasting into its WorldVibrations Radio Station, creating the first all-in-one broadcasting, streaming and podcasting appliance. The new WorldVibrations Radio Station & Podcaster (WVRS-P) is a device about the size of a VCR that allows users to develop, manage and operate a live or automated radio station over the internet, or over the air if properly licensed, while simultaneously producing and uploading individual podcasts. Users can capture live programming as it is broadcast on the WVRS-P for later podcasting or produce separate podcasts offline, integrating music, jingles and other material already stored on the unit while the radio station runs other content uninterrupted in automation-mode in the background. Once the podcast program is produced and edited, the WVRS automates the creation and uploading of the MP3s and XML pages needed to publish podcasts. WorldVibrations has also signed with Live365 to integrate the company's broadcast tools and services into the unit to allow internet broadcasters, as an option, to get up and running on the popular internet radio service in minutes. The units will begin shipping 8/22.

TVBR - TV News

ABC sued over reality show
There have been quite a few claims by independent producers and writers in recent months that this network or that stole their idea for a reality TV show. What's different this time is that the people who are suing ABC Television and Simon Cowell have been producing their show for a couple of years and have syndicated it to more than 125 stations. Jean Golden and Todd Walker, who co-created and co-host "Million Dollar Idea," which features inventors, say they pitched their show to an ABC exec early last year in an attempt to move it up to network television. Their lawsuit claims that every detail of the "Million Dollar Idea" show announced in mid-July by ABC and Simon Cowell (of "American Idol" fame) was stolen from their show, right down to the name, which they have trademarked. They're seeking tens of million in damages for trademark and copyright infringement. Contacted by TVBR, ABC had only this to say: "We have not even been served with the complaint in this matter, and so have no comment." You can check out the existing show at www.milliondollaridea.tv.

Transactions

1.25M WQUA-FM Mobile AL (Citronelle AL) from Radio Disney Group LLC (John Hare, pres et al) to Family Worship Center Church Inc. (Jimmy Swaggart). 58,750 escrow, balance in cash at closing. [File date 7/5/05.]

650K KUPA-AM Honolulu (Pearl City HI) from AM Radio 1370 Inc., a subsidiary of Legacy Communications Corp. (E. Morgan Skinner Jr.) to Broadcasting Corporation of America (Nathan W. Drage). 50K escrow, balance in cash at closing. [File date 7/5/05.]

Stock Talk

Another day of gains
Enthusiasm about the strength of the economy was muted by another day of record oil prices, but Wall Street still managed an up day. The Dow Industrials rose 21 points, or 0.2%, to 10,594.

Radio stocks were also higher. The Radio Index rose 0.913, or 0.4%, to 207.027. Beasley, which has been one of the more volatile issues of late, was up 4.6%. Hearst-Argyle gained 3.4%. Disney fell 2.6%, even though it had reported better-than-expected earnings following the closing bell the previous day.

Radio Stocks

**Here's how stocks fared on Wednesday**
Company	Symbol	Close		Change	Company	Symbol	Close		Change
Arbitron	ARB		41.43	+0.06	Jeff-Pilot	JP		49.95	+0.10
Beasley	BBGI		13.94	+0.61	Journal Comm.	JRN		15.85	-0.03
Citadel	CDL		13.38	+0.08	Radio One, Cl. A	ROIA		13.43	-0.05
Clear Channel	CCU		33.92	+0.17	Radio One, Cl. D	ROIAK		13.44	-0.04
Cox Radio	CXR		15.90	+0.04	Regent	RGCI		5.50	-0.09
Cumulus	CMLS		12.74	+0.21	Saga Commun.	SGA		14.55	+0.12
Disney	DIS		25.47	-0.67	Salem Comm.	SALM		19.04	-0.78
Emmis	EMMS		21.15	+0.39	Sirius Sat. Radio	SIRI		6.61	-0.09
Entercom	ETM		33.72	+0.30	Spanish Bcg.	SBSA		7.91	+0.03
Entravision	EVC		8.26	+0.01	Univision	UVN		27.00	-0.01
Fisher	FSCI		45.56	+0.41	Viacom, Cl. A	VIA		34.81	+0.08
Gaylord	GET		44.78	-0.61	Viacom, Cl. B	VIAb		34.70	+0.06
Hearst-Argyle	HTV		26.00	+0.85	Westwood One	WON		20.29	+0.14
Interep	IREP		0.70	-0.09	XM Sat. Radio	XMSR		33.90	+0.15
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]

The two individuals who commented on my letter (8/9/05 RBR #155) apparently missed the point. I don't personally care to hear a barrage of profanity either. I was offended last week when I took my kids to a baseball game and had to endure a constant barrage of shouted profanity from some Neanderthal sitting several rows behind us. My point was - - some people have way too much time on their hands. Despite all there problems in the world today, there are people from the Parent's Television Council and other groups who sit all day purposely listening for somebody to say something they don't like just so they can file a complaint with the FCC. It has a chilling effect on decisions about whether to air a movie like "Saving Private Ryan." And now the networks are skittish about airing ANYTHING live because they are concerned that some do-gooder will file a complaint. If you don't want your kids watching "Saving Private Ryan" or a live performance by Bono (who has been known to use the f-word from time to time), fine. My kids won't be watching either. But I resent any form of censorship that would prevent ME from watching it. I don't listen to Howard Stern or Opie & Anthony. I find them crude and boorish. But I would defend their right to do their shtick and your right to listen to it if you so choose.

Larry Fuss, President
Contemporary Communications LLC
Las Vegas, NV

Arbitrends

Radio Media Moves

Radio One taps
new PD in Cinci
Radio One has hired Phillip David March as PD of its Cincinnati station WIZF-FM. March will direct the overall programming of the station. March previously programmed Cumulus Broadcasting's WHRP-FM Huntsville, AL.

Kestenbaum to Katz
Former Arbitron Manager of Marketing Communications Gloria Kestenbaum has joined Katz Media Group in New York as Director of Corporate Communications.

RBR Radar 2005

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

Disney confirms it's
looking at radio bids
Currently are in the process of evaluating our strategic alternatives with regard to radio, including a potential combination, disposition or tax-advantaged transaction. However, there is no assurance that a transaction will occur, or if a transaction occurs how it might be structured. Radio Disney and ESPN Radio would not be included in any deal. RBR observation: If the price is right money talks or structure talks and all else walks. So ABC radio employees cross your fingers and keep tuned to RBR for your future details.
08/10/05 RBR #156

Interep see a little light
Gains for two in a row as Q2 commission revenue increased 5.3% to 21.7 million at Interep, giving CEO Ralph Guild something to crow about. Significant event for Interep in second quarter was our retention of the investment banking companies Allen & Company and Longacre Partners to advise the company on growth strategies and financial restructuring. Both companies are world-class investment banking firms. Their vision, expertise and connections within the media universe are unparalleled. We are working with them to help us restructure our debt, and to review and assess the strategic position of our company, including an appraisal of intra-industry and organic growth opportunities. RBR observation: Finally the proper words spoken on expertise and media universe and looking a intro-industry growth. Organic is cool. In short being a small indy radio rep firm ain't gonna cut it not matter how you look at the vegetable garden. If the Interep advising team is looking short term like between now and years end to set up a proactive movement for 2006 this is excellent. Then build for the next 10 years. That is what clients and media people need to see to do business with ya. And don't forget that personal touch.
08/10/05 RBR #156

Clear Channel reworks Plan A
CEO Mark Mays isn't moving to "Plan B", but he is adopting one aspect of the alternative being pushed by Bear Stearns analyst Victor Miller. CCU has modified its original plan to pay a special one-time dividend of three bucks after completing other restructuring moves. Instead, CCU will use at least part of that 1.6 billion for share buybacks, although there may still be a smaller special dividend. With its share price still in the doldrums, the company's board has authorized an additional 692 million in buybacks, returning the authorization to one billion bucks. RBR observation: Our observation - - not that anyone in San Antonio cares what we think - - is that selling off the concert business alone would just leave CCU stuck with other CCE assets that it might never be able to unload at a decent price. 08/10/05 RBR #156

Stations fined for
hurricane coverage
Remember back a year ago when WBBH-TV and WZVN-TV Ft. Myers-Naples were being applauded for their exceptional wall-to-wall coverage as Hurricane Charley came ashore and battered portions of their market? Well, it appears no good deed goes unpunished. The FCC has now fined the stations 24,000 bucks each because some emergency warnings were given only orally, without the required visual presentation, over the course of the emergency broadcast - - eight days non-stop in the case of Waterman Broadcasting's WBBH (NBC) and seven days for LMA'd WZVN (ABC), owned by Montclair Communications. The station owners had insisted that they did provide emergency information for hearing impaired viewers with on-screen displays and a crawl along the bottom of the screen, but not every bit of information cited by the FCC staff after reviewing tapes of the emergency coverage.
TVBR observation: Talk about Monday morning quarterbacking by Washington bureaucrats. If the FCC is going to take such a ridiculous hard-line view on deciding what is or is not "emergency" information long after the fact, no broadcaster is safe from being fined for judgment calls made in the midst of life-threatening emergencies. May we suggest that Kris A. Monteith, Acting Chief of the Enforcement Bureau, who signed this atrocious Notice of Apparent Liability, be dispatched by jet helicopter to the next major emergency to provide in-studio, on-the-spot calls - - working 'round-the-clock with everyone else in the newsroom - - on which specific pieces of information out of the hundreds or thousands broadcast have to be presented on the crawl as well.
08/10/05 TVBR #156

Gray defends newspaper spin-off
Bear Sterns analyst Victor Miller wanted to know why Gray didn't just sell the newspapers and put far more in the company coffers than the 40 million that the spin-off, Triple Crown Media, is going to return to Gray after the split? Gray President Bob Prather assured the analyst that the company had looked at selling the newspaper division several times in recent years. "The tax burden would have been just outrageous,"
08/09/05 TVBR #155

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3 Positions Available

Eagle Radio has the following positions available: Board Operator (entry-level), Board Op/On-Air Announcer, and Programming Manager. - See Radio Careers

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. -

See Radio Careers

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