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Volume 22, Issue 158, Jim Carnegie, Editor & Publisher

Friday Morning August 12th, 2005

Radio News®

We're Number 10!
Hardly a shout you're likely to hear in a sports stadium, but it could mean more money to radio station owners in Atlanta. After fighting for years to maintain their market's place in the top 10, including the addition of some counties a few years back, folks in Boston are going to have to accept that they are no longer part of that elite group. Fast growing Atlanta - - "Capitol of the South" - - has moved up to #10 in the annual population re-ranking by Arbitron, effective with the Fall book, pushing Beantown to #11. The new list, available on Arbitron's website, shows New York still at #1 with 15.3 million people 12+. The tail end of the list, at #298, is Casper, WY with 59,100.

RBR observation: Atlanta was already a top 10 Nielsen DMA, but TV markets and radio markets don't necessarily match up. Houston, which remains at #7 with Arbitron, is not a top 10 market for Nielsen, but rather #11. That's quite convenient for Arbitron, which is running its latest PPM test in Houston, hoping to make it the first market to use PPM for both radio and TV ratings in a joint venture with Nielsen, while not clashing with Nielsen's ongoing effort to roll out its own Local People Meters in the top 10 TV markets.

Analyzing the bidders
for Emmis' TV stations
Bear Stearns analyst Victor Miller is telling clients that Emmis Communications is likely to get 1.15-1.25 billion from the sale of its 16 TV stations, pretty much in line with the estimate RBR/TVBR has stuck with from the time Emmis hung out the "for sale" sign - - 1.1-1.2 billion - - and above the one billion figure that's been speculated by others on Wall Street. Miller's analysis sees two key markets in the sell-off - - WKCF-TV (Ch. 18, WB) Orlando, FL and KOIN-TV (Ch. 6, CBS) Portland, OR. With 36-40 million in revenues and 20 million in cash flow, Miller sees WKCF selling for 250-300 million if Emmis can get a multiple of 12.5-15 times. He notes that there are three potential duopoly buyers, Cox Broadcasting, Hearst-Argyle and Post-Newsweek. For KOIN, he estimates 28-30 million in revenues and 10-12 in cash flow, so a "premium multiple" could bring 125-150 million. Tribune could be a duopoly buyer and there are other major companies who are regional players. He notes that Viacom might even be interested in buying the CBS affiliate, but would have to divest a smaller market station somewhere to stay under the 39% cap. The desert is also hot, Miller says, at least as far as values for Emmis' KRQE-TV (Ch. 13, CBS) Albuquerque, NM and KGUN-TV (Ch. 9, ABC) Tucson, AZ, which together could bring 115-135 million. Miller thinks it is unlikely that one company will buy the entire Emmis group, but rather that there will be two-to-six winners out of the three dozen or so companies who've bid for some or all of the stations.
| Check out his valuation summary |

July revenues downfor Journal Broadcast Group
TV suffered from the lack of political ads, while radio revenues were flat in July for Journal Broadcast Group. Total broadcast revenues, even with the addition of a TV station in Green Bay, WI, were down 4.3% to 10.9 million. Radio was essentially flat, down 10K to just over six million. TV revenues dropped 8.9% to 4.9 million - - down 19.4% without the Green Bay station. Newspaper revenues were up 2.3% to 23.6 million, so parent company Journal Communications reported that July revenues were flat at just over 34.9 million.

Powell becomes an investor
As reported in our special update yesterday morning, former FCC Chairman Michael Powell has landed at Providence Equity Partners, where he'll help the nine billion bucks fund look for communications investments. Providence is already a TV investor, having been one of the venture capital partners in the recapitalization of Freedom Communications as some members of the newspaper/TV group founder's family sought to buy out their disgruntled cousins. "Serving as a senior advisor to Providence Equity, the preeminent private equity firm in the global media, communications and information industries, provides a unique chance for me to apply my experience. Providence Equity has a portfolio of market-leading investments, an exceptional track record of delivering superior returns to their investors, and a superb group of investment professionals in the US and Europe. I am very committed to helping Providence Equity reach even greater heights, and look forward to working with the entire Providence team to build on the firm's market leadership and help secure new investment opportunities," said Powell as he announced his new job.

RBR observation: In all honesty, we doubt that Powell will be looking at any broadcast investments. "New Media" is the sexy place to be and there aren't too many private companies like Freedom out there looking for venture capital backing. But we don't doubt that he'll earn his keep at Providence. Powell did learn quite a bit about the industries the FCC regulates during his term at the Commission. And if people would pay good money for advice from Reed Hundt, who made a point of absolutely never learning anything about any of the industries he regulated while heading the FCC, Michael Powell should be worth a heck of a lot more. (What about Bill Kennard, you ask? He knew the communications business, even before his FCC days, but that didn't stop him from making stupid decisions based on politics, rather than reality. Presumably he's now dealing with reality since real money, including his own, is on the line as he works on deals for the Carlyle Group.)

Word Network attacks Sirius for dumping
Remember when The Word Network organized repeated protests outside the home of XM President Hugh Panero because he wouldn't carry the Gospel music/Christian teaching channel aimed at African-Americans, even though it was already being carried by rival Sirius Satellite Radio? Now Sirius has decided not to renew its contract with Word Network, which expires, September 2nd, and Word Network is rolling out the heavy artillery. It's gotten Rev. Jesse Jackson, who hosts a show on the network, to complain about being dumped by Sirius, and it's delivered 15,000 letters of protest to Sirius VP/Programming Jay Clark. A Sirius spokesman tells RBR that the satellite radio company constantly surveys users and re-evaluates its channel lineup - - and decided not to renew its relationship with Word Network. At this point, that move is not being reconsidered. He wouldn't comment on whether any money changed hands under the existing deal to carry the network, which also has terrestrial radio affiliates, on Sirius.

RBR observation: Should Mel Karmazin now expect pickets outside his home? We'd suggest that the Word folks would find it much more fun to protest outside Mel's Naples, FL waterfront home next winter than now outside his NYC condo.

Brokers to honor Fritts
As Eddie Fritts takes his victory lap - - with no hint yet of a successor to head the NAB - - the National Association of Media Brokers (NAMB) has announced plans to give Fritts its "Lifetime Achievement Award" at the NAB Radio Show next month in Philadelphia. "Eddie Fritts is a legendary statesman who has served our industry extremely well. We owe him a debt of gratitude for his years of leadership and his vision of what local broadcasting can be," said NAMB President Larry Patrick, President of Patrick communications. Previous recipients of the NAMB's "Lifetime Achievement Award" are Jim Duncan and Vince Pepper.

Conference Calls Q2 2005

Carl Hirsch knows the way to San Jose (and likes it)
The addition of two stations in San Jose, CA, which it is LMAing pending closing, gave NextMedia a 6% radio revenue gain in Q2 to 22.8 million. Executive Chairman Carl Hirsch told analysts that revenues for NextMedia's other stations were flat, while San Jose was "up substantially." Radio cash flow rose 3.2% to 9.7 million. Outdoor had an even better quarter, with revenues up 25.3% to 11.4 million and cash flow gaining 33.3% to 4.8 million. In all NextMedia's pro forma revenues were up 11.8% to 34.2 million and cash flow rose 11.5% to 14.5 million. For Q3, the company is telling analysts to expect revenues to be up 10% (but only flat for its non-San Jose radio stations) and cash flow 7%. NextMedia is privately held, but has public bonds.

Adbiz©

Nielsen to launch collaborative product placement study
Nielsen Media Research and Nielsen Entertainment announced the collaborative launch of a research study to finally provide an overall assessment of the factors impacting product placement effectiveness. At a time when there has been intense focus on ROI for advertising generally, the spotlight on brand integration has spawned several tracking and evaluation services. The study's initial participants include: CBS/UPN Television Networks, Discovery Television, Magna Global, Mediacom, OMD, PHD, Sprint, The Weather Channel, and Zenith Optimedia.
| More... |

Leo Burnett, Morgan Stanley part ways
Leo Burnett Chicago and Morgan Stanley are splitting up after 17 years, the agency announced. Estimated billings are 80 million. "In light of recent changes at Morgan Stanley, Leo Burnett has decided to resign as its advertising agency of record," according to a statement. "We tremendously value our long-standing partnership with Morgan Stanley and wish them the best."

Anheuser-Busch expands multicultural efforts
Anheuser-Busch has reportedly created two VP-level positions to head the company's multicultural efforts. John Furr, Jr., VP/Sales Development and Community Affairs, will oversee African-American marketing efforts. Henry Dominguez, VP/Gov't. Affairs, West Region, is the new VP/Hispanic Marketing. The appointments follow last week's promotion of Bob Lachky to EVP/Global Industry Development, and Marlene Coulis there succeeding him as the new VP/Brand Management and Director of Global Creative. Coulis is the first woman and the first Latina in the company's history to hold the job, A-B said. Coulis has been with the company for 13 years, most recently as VP/marketing planning and research and customer satisfaction.

Media Business Report

CBS entering magazine biz
In an unexpected move, CBS announced yesterday that it will launch a new quarterly magazine next year called "WATCH!" It will include exclusive interviews, photos, previews and behind-the-scenes features of CBS talent and shows, as well as guides to travel, fashion and "living the Hollywood lifestyle." The debut issue will feature interviews with "Two and a Half Men" stars Charlie Sheen and Jon Cryer, as well as exclusive photos of "The Amazing Race" host Phil Keoghan's recent cross-country road expedition; CBS Sports' David Feherty talking golf and Pebble Beach with "Criminal Minds" star Thomas Gibson; a trip down memory lane with Martha Byrne of "As the World Turns"; first-person accounts from CBS News Correspondents Lesley Stahl and Lee Cowan on covering the biggest stories of the last 25 years, including the Reagan assassination attempt and last year's tsunami; an interview with "How I met Your Mother" star Neil Patrick Harris; and a talk with CBS News' John Roberts on traveling with the president on Air Force One, among other features. WATCH! will be distributed freely at CBS show tapings, Paramount Parks and through more than 200 CBS affiliates across the country, debuting with a 400,000 circulation. The magazine is being published by the CBS Communications Group, in association with McMurry, the nation's leading custom publisher. The project is being headed up by Gil Schwartz, Exec. VP of CBS Communications Group, who happens to be an accomplished author under the pseudonym "Stanley Bing."

Media Markets & MoneyTM

Tribune sells 780M in bonds
The coffers at Tribune Company have been refilled, with a planned 650 million bond sale increased to 780 million due to strong demand. The offering was in two parts - - 450 million of 4.875% notes due 2010 and 330 million of 5.25% notes due 2015. Tribune says the proceeds will be used to repay all of its outstanding commercial paper, with the rest for general corporate purposes. "With our commercial paper balances in the 600 million range and with 420 million of fixed-rate debt maturing over the next 15 months, we believe this is an opportune time to lock in long-term rates that we consider attractive," said Donald Grenesko, Tribune Sr. VP/Finance & Administration. The offering, lead-managed by Banc of America Securities, Citigroup Global Markets and Merrill Lynch & Co., is expected to close Monday (8/15).

Washington Beat

Long-pending Hawaii sale gets OK
A deal which has been pending since 2003 - - the 2.9 million sale of five Hawaii radio stations from Big Island Radio to Hilo Broadcasting - - has at long last gotten approval from the FCC, despite claims by a competitor that it will result in undue market concentration. The FCC rejected claims that an LMA of the stations amounted to an unauthorized transfer of control, but it did "admonish" Big Island for failing to file a timely request for a waiver of the ownership limits in connection with the LMA - - specifically for failing to file engineering maps showing contour overlaps completely over the Pacific Ocean until they were requested by the FCC staff. But the Commission approved the waiver, determining that Maui and the "Big Island" (Hawaii) are separate markets and that there is not, and never will be, anyone living in the overlap area.

Programming

DC suburb, XM strike deal on alerts
Arlington County, VA has partnered with XM Satellite Radio to allow the company to send to subscribers via e-mail or cell phone text messaging-an expansion of a public warning system already used in the county-Arlington Alert. Those messages will be broadcast on Channel 214, traffic and weather updates in the Washington region. The pact was hailed as the first partnership between DC-based XM and any local government. The free service sends info about emergencies such as road closures, impending storms and traffic tie-ups.

RBR observation: yet another way to offer local data and service. Is it another dodge of their FCC license, which says no local offerings? Nope, just another crafty move by Panero and company - - channel 214 can be heard nationwide. This will likely move to other markets and, of course, Sirius will probably offer it too. At least subscribers won't have to be completely in the dark when a dangerous local event occurs.

Richard Simmons scores Sirius talker
Sirius announced fitness expert Richard Simmons will create and host a weekly three hour talk show that will air exclusively beginning on 10/2. On his show, airing Sundays from 3 pm to 6 pm ET, Simmons will read people's letters on the air and then call them to give advice, provide a proverbial shoulder to cry on or just make them laugh. Simmons will often broadcast the show live from his Beverly Hills weight loss center with a live studio audience who will have the opportunity to interact directly with him. In addition, he will give the latest information on health, diet, fitness and overall well-being.

Transactions

417.5K KQMO-FM Shell Knob MO from Magic Circle Radio Inc. (Galen O. Gilbert) to Falcon Broadcasting Inc. (DeWayne Gandy, Bill Lewis, Janet Gandy). Duopoly with KRMO-AM Cassville M, KKBL-FM Monett MO & LMA/acq. of KSWM-AM Aurora MO from same seller. LMA of KSWM-AM/KQMO-FM since 3/1/04. [File date 7/7/05.]

417.5K KSWM-AM Aurora MO from 940 Radio Inc. (Galen O. Gilbert) to Falcon Broadcasting Inc. (DeWayne Gandy, Bill Lewis, Janet Gandy). Duopoly with KRMO-AM Cassville M, KKBL-FM Monett MO & LMA/acq. of KQMO-FM Shell Knob MO from same seller. LMA of KSWM-AM/KQMO-FM since 3/1/04. [File date 7/7/05.]

100K KVID-FM CP Barstow CA from Educational Media Foundation (Richard Jenkins) to Ondas de Vida Network Inc., related to Centro Cristiano de Fe Inc. (Hector E. Manzo, Maria Manzo, Guillermo Ureta). 25K cash at closing, 75K note. Seller has 10-year right of first refusal to buy back the station. CP is for Class A on 89.1 mHz with 260 w @ 725'. [File date 7/6/05.]

Stock Talk

Late rally boosts stocks
At some point late in yesterday's session, traders put aside worries about high oil prices and decided to buy stocks anyway. The Dow Industrials rose 91 points, or 0.9%, to 10,686.

Radio stocks were also up. The Radio Index gained 2.782, or 1.3%, to 209.809. Regent had another good day, up 3.8%. Fisher gained 3.3%.

Radio Stocks

**Here's how stocks fared on Thursday**
Company	Symbol	Close		Change	Company	Symbol	Close		Change
Arbitron	ARB		41.98	+0.55	Jeff-Pilot	JP		50.45	+0.50
Beasley	BBGI		14.10	+0.16	Journal Comm.	JRN		15.82	-0.03
Citadel	CDL		13.66	+0.28	Radio One, Cl. A	ROIA		13.54	+0.11
Clear Channel	CCU		34.05	+0.13	Radio One, Cl. D	ROIAK		13.55	+0.11
Cox Radio	CXR		15.88	-0.02	Regent	RGCI		5.71	+0.21
Cumulus	CMLS		13.05	+0.31	Saga Commun.	SGA		14.48	-0.07
Disney	DIS		25.88	+0.41	Salem Comm.	SALM		19.38	+0.34
Emmis	EMMS		21.25	+0.10	Sirius Sat. Radio	SIRI		6.60	-0.01
Entercom	ETM		34.39	+0.67	Spanish Bcg.	SBSA		8.04	+0.13
Entravision	EVC		8.32	+0.06	Univision	UVN		27.14	+0.14
Fisher	FSCI		47.08	+1.52	Viacom, Cl. A	VIA		35.14	+0.33
Gaylord	GET		44.70	-0.08	Viacom, Cl. B	VIAb		35.08	+0.38
Hearst-Argyle	HTV		26.07	+0.07	Westwood One	WON		20.73	+0.44
Interep	IREP		0.75	+0.02	XM Sat. Radio	XMSR		33.54	-0.36
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]

Regarding "Plan B"
(8/9/05 RBR #155)

So...another Wall Street genius, who has never designed a format, built a schedule, or sold an ad is going to give CC advice? Great...these are the same folks who have "helped" destroy other industries in their zeal to "maximize shareholder value." They've forgotten that what's best for the next two quarters may well not be what's best for the corporation or indeed an entire industry for the long haul. We ought to toast the next major CEO who publicly tells the investment community to tend to their own business, and he'll tend to his.

Mel Rainer
VP/Marketing
Extremetix, Inc.

Arbitrends

RBR Radar 2005

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

Alert - Michael Powell
out of Think Tank
Now becoming a deal maker himself has joined Providence Equity Partners, a private equity firm in Providence, R.I. Powell becomes senior adviser, puts high visibility on the buyout firm. Powell now will be putting his former FCC Chairman throne to work and will deal with the many firms he faced during his years at the FCC. Michael is only 41 years old and is the new breed in our communications medium and interesting how he thinks as he pays close attention to the business environment but he also pays closer attention and learns from his two young teen age sons and their communications and media habits. Powell recently told RBR/TVBR Publisher Jim Carnegie that by watching your children you learn where communications is today and going tomorrow and that is where the money will follow. In short Powell stated on the record he views this position and challenge as ""This is my main event."
08/11/05 RBR/TVBR Alert

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). 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.
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. 08/11/05 RBR #157

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. 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.
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?
08/11/05 RBR #157

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. 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. RBR observation: Guess Rupert is set in his ways and at no cost or how fair and balanced it may be. We at TVBR still and will continue to state we do not need more regulation from the Feds but less. Gov stay out of this business and go fix some roads or highway.
08/11/05 RBR #157

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

Hey Talk Radio GSM

Are you a direct "animal" with the savvy to manage transactional business? Top 20 market waiting for the right GSM. Need a top performer with a proven track record of success to take a new Talk station to record heights. Can you attract and grow top sales talent - build and lead a top performing sales organization? What about maximizing inventory, on air and off, of a high profile talk format? Answer is - Yes - (no calls) send your resume in Confidence to -
[email protected]
See Radio Careers

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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