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Volume 23, Issue 160, Jim Carnegie, Editor & Publisher
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Thursday Morning August 17th, 2006
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Radio News ®
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 Farallon wants Emmis
to go Dutch again
Now that Emmis CEO Jeff Smulyan has pulled his bid to take the company private, Farallon Capital is left holding a big stake that it had expected to cash in. So, the big investment fund, which is advised by Connoisseur Media CEO Jeff Warshaw, is proposing Plan B. It wants Emmis to repeat the Dutch auction process it used last year to buy back a big chunk of its stock. Farallon made its request public in an SEC filing, which prompted a 4.7% price rise yesterday in Emmis' stock.
| Read the letter |
Big gains at Journal Broadcast
July was a strong month for Journal Broadcast Group. Radio posted strong revenue gains, up 5.4% to 6.3 million. Part of that was political, 120K, but the rest was a gain in core business. Meanwhile, TV revenues soared 97.2% to 9.56 million last month? OK, that includes some recent acquisitions, but if you take out those new stations the TV group's revenues were still up 24.6%, with only 480K coming from political. In all, Journal Broadcast Group saw July revenues rise 46.4% to 15.89 million - or 14% on a same stations basis. Elsewhere inside Journal Communications, the news for the month was not so good. Publishing revenues fell 5.4% to 24.99 million. Ad revenues fell 5.1% to 17.14 million. The flagship Milwaukee Journal Sentinel saw ad revenues decline 4.7% in July, while ad revenues for the company's community newspapers and shoppers fell 6%.
RBR observation: Unfortunately for everyone else, the performance of the Journal Broadcast radio group is not typical of the rest of radio. It has been growing some new stations as well as, from all indications, just wearing out shoe leather on the streets to keep building local sales. Clear Channel, working against the easy comps of Less is More in 2005, has been recording similar gains this year, but July wasn't up 5% for the whole of radio. A 1% gain would be greeted with glee, but don't bet on that happening.
 Another sideways month
RAB will report July radio revenues in a couple of weeks and no one is expecting a big jump. CL King analyst Jim Boyle says his market-level sources indicate that July will come in flat, which ain't great but beats his -2% forecast and the Street consensus of -1%. Boyle claims to be getting confidential data from about 50 markets. He says July was flat in small markets (#76 and higher), down 1% in mid-size markets (#26-75) and flat in the top 25 markets. He sees more sluggishness ahead and says that affirms his view that "radio is in a secular downdraft and not a cyclical hiccup." What's to be done? Well, Boyle has some advice. "Radio should ignore its near term stock price and invest long term in its programming. The public radio groups are unlikely to bolster stock prices in a sustainable, substantial way if they cut costs to the bone, from our vantage. Radio's audience erosion should not slow until its 'product' is improved, in our view. On our opinion, investing in one's on-air talent, staff, research and promotion so that the programming product is enhanced is a better long-term plan than 'milking' the product dry by cutting back until radio might just as well be another technology playing music," Boyle wrote.
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 Radio thanks TV as gains
approach double digits
Commercial radio advertising revenues made big gains in 2005, rising 8.7% over the previous year. If that fails to jibe with all of the gloomy reports you've been reading over the past several years, consider that the media markets leading the charge are Calgary, Ottawa-Gatineau and Toronto. Radio stations raked in about 1.3B, over 20% of which was logged into the profit column in the ledger. Stations in the larger markets were pulling closer to 30%. According to the Globe Investor, the surge was credited to a change in the practices of the rival television industry. Canadian TV companies seem to have shifted their sales focus to regional and national business, and are said to have pretty much left local business to radio. Globe investor singles out restaurants and retail venues as having no place else to go. The robust growth of Canadian radio compared to the ongoing struggles south of its border are not going unnoticed. Canadian troubles involve things like selling out inventory too soon, making it difficult to take advantage of supply-and-demand price increases, and the creation of a difficult environment in which to sell ownership dereg to the Canadian government.
RBR observation: The key word for broadcasters, once again, is local. This is the sacred ground that broadcasters must defend above and beyond anything else. The question is, can the same television/radio national/local dynamic happen here? Will US broadcast television companies decide to waltz away from their local client base? Frankly, we don't see that happening.
Do payola and ratings scrutiny constitute
"Unwarranted Intrusions"?
A new book, "Unwarranted Intrusions" by Martin Fridson (published in 2006 by John Wiley & Sons) looks at the relationship between government and business, and sees more than a few areas in which he believes the government should simply go away. He says it should stop trying to get people to save money and buy houses. It should get out of the bank deposit insurance business. He nudges into broadcast territory when he says that the occasional effort by politicians to reform campaign finance is a form of false advertising. And he firmly enters broadcast territory with his assertion that the government should leave A.C. Nielsen and its Peoplemeter alone, and it should make payola a completely legal practice. The 309-page hardcover book is said to be available at online bookstores.
 New bosses at Katz
Katz Media Group CEO Stu Olds has filled the position created by the sudden ouster of Steve Shaw (7/5/06 RBR #129). The new President of Katz Radio Group is Mark Gray, who had headed one of its rep companies, Katz Radio, since 2000. In his new position Gray will oversee Katz Radio, Christal Radio and Eastman Radio, the three rep companies that serve clients other than Clear Channel, which owns Katz Media Group. Olds went outside the company to find Gray's successor. Chad Brown is the new President of Katz Radio, effective September 5th. Until recently he was VP/GM of WCBS-FM New York.
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Ad Business Report TM
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 Buyers comment on ratings RFP issue
Clear Channel, which is leading the Next-Generation Electronics Ratings Evaluation Team RFP process, kicked everybody off the evaluation team that signed with Arbitron (6/23/06 RBR #123) for PPM and also suspended negotiations with Arbitron on the new ratings system until it gets accreditation from the Media Ratings Council. CBS Radio, Emmis, Greater Media, SBS, Beasley and Bonneville are still off the RFP team. We asked a few buyers: What do you think about the RFP issue/controversy?
| Read their comments |
Wal-Mart chooses Saatchi & Saatchi
X employee communications
Wal-Mart has named Saatchi & Saatchi X, Springdale, AR its in-store marketing AOR for shopper and employee communications. The retail giant said it was pleased with Saatchi's work as its in-store innovation partner and believes as an AOR it will achieve even greater results. The service isn't a direct component of its ongoing creative agency review.
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| Media Markets & Money TM |
Straus will stress radio again
RegionalHelpWanted.com owner Eric Straus, former head of the Straus Media Group, is getting back into the radio business with a three-station acquisition in upstate New York, operating under the name Regional Radio Group with Clay Ashworth serving as president. The stations are WWSC-AM Glens Falls, WCQL-FM Queensbury and WCKM-FM Lake George, all in an unrated portion of the state north of Albany and not far from the Vermont border. According to Dick Kozacko of Kozacko Media Services, who provided brokerage services along with Jim Hoffman of Explorer Communications, the pricetag came in at 2M. Kozacko noted that the formats are Talk, Hot AC and Oldies, respectively. Straus said, "We have a huge stable of extraordinary broadcasters here at RHW, and we are all great believers in the extraordinary power of local radio. We think it's an excellent time to re-enter station ownership and look forward to exciting growth in the years ahead."
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| Washington Media Business Report TM |
DBS companies pull out of wireless auction
A joint venture of direct broadcast satellite (DBS) television companies DirecTV and EchoStar formed to try to acquire wireless spectrum in FCC Auction 66 has apparently dropped out of the bidding. After 18 rounds, the total amount committed was approaching 9.5B, a total which is expected to continue to increase. 740 out or 1120 licenses are spoken for, and telco companies are doing most of the talking. The DBS pairing was most likely intended to enable the addition of wireless broadband to their menu of services. A Reuters report mentioned the possibilities that the companies may pursue other means to the same end, such as a joint venture with a mobile satellite service company. It also mentioned merger speculation, an action which was attempted and shot down by the FCC back in 2002.
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| Internet Media Business Report TM |
 "Wi-Fi Walkman"
ready for retail
MarketWatch says within the next few weeks, Australian-based Torian Wireless will begin showing U.S. retailers a Wi-Fi "Walkman." The InFusion is a portable, battery-powered device which tunes in Internet radio stations. It also has an FM radio, an audio recorder, and an MP3 player. It does not have a built-in speaker. The retail price could be as low as 229 dollars. George Parthimos, Torian's founder, said inspiration for the device came to him while he was traveling in Europe in 1999: "I wasn't able to hear my football teams from back home in Melbourne. It wasn't rocket science to come home and work up a design." A working prototype of the device has been seen publicly. In January, at the 2006 CES, InFusion won an Innovations Honoree award. Parthimos has an agreement with a manufacturer in Malaysia to produce the InFusion. "In a couple of weeks, we'll be getting samples for distributors and we can get into mass production in six to eight weeks," he told MarketWatch. Availability at retail may be limited to a few boutique stores and his website (www.torianwireless.com) unless a retailer like Best Buy places a big order. "There are a lot of niche players who'd like to take this on."
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| Ratings & Research |
 We're #1 in the whole country
Spanish Broadcasting System is laying claim to having the most listened to morning radio show in the entire United States. Based on the Spring 2006 Arbitron book, SBS says "El Vacilón de la Mañana" (The Morning Goof-Off) featuring Luis Jimenez and Moonshadow on WSKQ-FM "La Mega 97.9" New York is the most listened to morning show in the country. It was the top-rated morning show in all of New York, New Jersey and Connecticut, with a quarter of a million listeners tuning in to "El Vacilón de la Mañana," on average, every 15 minutes, SBS said. Celebrating 13 years on the air in NYC, SBS says "El Vacilón de la Mañana" leads Morning Drive in all prime ages including Adults and Men 18-34, 18-49, 25-49 and 25-54. On average, the show's audience spends 5:45 hours each week with Luis and Moonshadow, surpassing the listenership of any other morning show in New York and in the United States. Mega's "El Vacilón de la Mañana" morning show reaches more than 900,000 listeners every week, 71% of which are Adults 18-49 year-olds, SBS declared after crunching the Arbitron numbers.
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| Sales |
FastStart scholarship recipients named
The Radio Advertising Bureau (RAB) and BMI have announced the recipients of the 2006 FastStart to Radio Sales Success Minority Scholarship Program. This is the sixth consecutive year that BMI has sponsored the scholarship program that provides recipients with full tuition to the Gary Fries RAB Radio Training Academy in Dallas, Texas, or the Academy's Off-Campus Extension Program. The 25 recipients represent a broad range of group sizes, and come from various markets and regions across the country.
| Here is the list |
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| One On One |
 David Kennedy
After a long career that took him to the CEO position at Susquehanna Media, David Kennedy is now wrapping up loose ends after selling off the company's radio and cable assets for the founding family. What's next for this well-known radio veteran? Inquiring minds want to know. Yesterday we asked: What attracted you to radio?
(8/16/06 RBR #159).
How did you get from spinning records in Toledo
to running the entire company?
I joined Susquehanna's WLQR as a part time weekend overnight announcer. I had developed a good working relationship with the program director there, Rick McDonald, who, incidentally, stayed with the company until last year, when he retired. A few years after I was hired, I was doing a Sunday night shift and Rick was due in to do the Monday morning show-and he never showed up! I had to do the show myself and about halfway through the show the studio phone rang and it was his wife. She told me that Rick had been in an accident on his way to work and was in the hospital. He was fine, but he wouldn't be able to come in for at least a week, if not longer. He had asked me if I would work with the other announcers to try and reschedule people to do different shows. As it turned out, no one could do the morning show. I could, I was in college at the time and didn't have any early morning classes, so I ended up doing the show. When he returned to work, Rick met with me and told me that he listened while he was in the hospital and he liked what he had heard, and asked me if I'd be willing to do the morning show from that time on. Thus, I ended up in morning drive working with him for a while and then with other people. That's how I ended up going from all nights into mornings. It was because the PD was in an accident with a milk truck!
| Read More... |
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| TVBR TV News |
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 Baton Rouge TV
pleads no foul on VNRs
ABC 2 WBRZ-TV Baton Rouge, owned by the Manship Family, is one of the stations said to be on the FCC's inquiry list as it looks into the broadcast of unattributed VNRs. The station says it has done nothing wrong, and has not changed its policy on VNR usage. According to the Internet version of a local paper, theadvocate.com, WBRZ aired material on ethanol production put together on behalf of German-based Siemens by a PR firm. One of the company's business lines is the construction of ethanol plants. WBRZ's news director said that the information used in the news spot was checked for accuracy, and that the station did not receive any payment for running it. And although the source of the footage used was not clearly referenced, a Siemens' employee appearing in it was clearly identified. The issue of unattributed VNRs was a hot potato in Washington last year, receiving a great deal of Capitol Hill attention. In a statement released in spring 2005, the FCC said "Whenever broadcast stations and cable operators air VNRs, licensees and operators generally must clearly disclose to members of their audiences the nature, source and sponsorship of the material that they are viewing. We will take appropriate enforcement action against entities that do not comply with these rules." (4/15/05 TVBR #75)
TVBR observation: The lack of direct payment for the airing of such footage is lot likely to carry much weight if an investigation gets that far. The fact that a budget-conscious station is filling airtime with free content, rather than content it paid to produce on its own, can be construed as a form of payment. We have no idea if the FCC will consider the fact that in this case, at least, a Siemans employee was identified, to be sufficient, although somehow we doubt it. On the other hand, if the entire segment had been attributed to Siemans, there would be no reason for the station to be on the FCC's list at all.
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| Transactions |
200K WLMC-AM Myrtle Beach SC (Georgetown SC) from Cumberland A&A Corporation (Gardner H. Altman Sr.) to R.J. Staley. 10K earnest money, balance in cash at closing. Duopoly with WGTN-AM. Buyer will return CP for WWGS-AM to FCC for cancellation. [File date 7/27/06.]
156K WACQ-AM Carrville AL from Progressive United Communications Inc. (Frank C. Cummings) to Hughey Communications Inc. (Randall Hughey, Debra Hughey). 106K cash, 50K debt forgiveness. LMA until closing. [File date 7/26/06.]
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| Stock Talk |
More evidence of low inflation
The government's CPI report showed consumer price inflation continuing at a relatively slow pace, strengthening Wall Street beliefs that the Fed will not resume its rate hikes next month. The Dow Industrials rose 97 points, or 0.9%, to 11,327.
Radio stocks went along for the ride. The Radio Index gained 1.065, or 0.8%, to 134.568. Emmis was the big gainer, up 4.7% as a big investor pressed the company for a massive share buyback. Westwood One gained 3.3%. After the closing bell, the company announced a group deal with Cumulus Media for its Metro Source newswire service.
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| Radio Stocks |
Here's how stocks fared on Wednesday
| Company |
Symbol |
Close |
Change |
Company |
Symbol |
Close |
Change |
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Arbitron
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ARB
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35.99
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-0.53
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Hearst-Argyle
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HTV
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21.53
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+0.34
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Beasley
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BBGI
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6.97
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-0.04
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Journal Comm.
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JRN
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10.73
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+0.08
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| CBS CI. B |
CBS |
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27.56
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-0.08
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Lincoln Natl.
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LNC
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59.42
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+0.77
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| CBS CI. A |
CBSa |
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27.52
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-0.08
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Radio One, Cl. A
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ROIA
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5.84
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unch
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| Citadel |
CDL |
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8.75 |
+0.07 |
Radio One, Cl. D
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ROIAK
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5.89
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-0.01
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Clear Channel
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CCU
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27.89
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+0.09
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Regent
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RGCI
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4.06
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-0.04
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Cox Radio
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CXR
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15.17
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+0.16
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Saga Commun.
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SGA
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7.40
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+0.15
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Cumulus
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CMLS
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9.39
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+0.12
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Salem Comm.
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SALM
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10.81
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-0.03
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Disney
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DIS
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29.71
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+0.07
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Sirius Sat. Radio
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SIRI
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3.65
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-0.10
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Emmis
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EMMS
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12.04
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+0.54
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Spanish Bcg.
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SBSA
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4.38
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-0.01
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| Entercom |
ETM
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24.09
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+0.41
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Univision
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UVN
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33.50
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+0.01
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Entravision
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EVC
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6.89
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-0.11
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Westwood One
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WON
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6.93
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+0.22
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Fisher
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FSCI
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40.51
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-0.20
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XM Sat. Radio
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XMSR
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11.48
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+0.47
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Gaylord
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GET
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41.63
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+1.47
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Bounceback
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 We want to
hear from you.
This is your column, so send your comments and
a photo to [email protected]
There is a simple "S0LUTI0N" to the drama being played out by the mega-radio companies. It is "INVEST" into your product!!! What does that mean? It means, spend some money and invest into your "production / creative" department. Mr. Hogan and others would respond; What department is that? It's the department that got consolidated with everything else when they sold everyone on the BS that "consolidation is good." Back only 8 yrs ago, each station had their own production manager, responsible for producing quality commercials (:60, :30, :10), it didn't matter how long, it mattered if they caught the listeners attention. The AEs had more help and someone committed to getting results, versus now, just quickly producing a poor commercial. Everyone is arguing about the length of the spots, when in reality it's the quality. Sure, five quality :30s is better than five :60s. But five "QUALITY" :60s is better than THREE BAD :30s. That is "common sense" which most of these large radio companies has lost sight of. I have 8 personal good friends who were top level sales managers & AEs who have left the industry because the companies will not invest back into their product. They tell Wall Street that they are, but behind the doors, they are not, and everyone "IN" the industry is afraid to say it. LIM - Should mean.....the amount of stations a company can own...that's why radio is in trouble now! Too many Wall Street executives who think they know the solution, when more LOCAL GMs per station is the answer! How about this question; What "EXACTLY" has been good about consolidation? Here comes some more blah, blah, blah. I'm having fun scooping up Internet revenue directly from the radio biz!
Damon E. Balch
President & CRO
Black & White Media
Vancouver, WA
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Below the Fold
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Ad Business Report
Buyers comment on ratings
RFP issue
Rich Russo, JL Media;
First being that no client has ever avoided radio due to its methodology...
Media Markets & Money
Straus will stress radio again
Eric Straus getting back into the radio biz with a 3-station acquisition...
Internet Media Business Report
"Wi-Fi Walkman"
Ready for retail within
the next few weeks...
One On One
David Kennedy discusses
his views on radio today...
Ratings & Research
We're #1 in the whole country
Spanish Broadcasting System is laying claim...
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Stations for Sale
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CD Border 25kw FM
Profitable competitive op.
Small/dual market FM with huge upside for turnaround operator.
595K 781-848-4201 or [email protected]
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Radio Media Moves
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 Murphy heading duop
Beth Murphy has been named Nashville Market Manager for Cromwell Radio Group, putting her at the helm of WBUZ-FM and WVNS-FM. Murphy was formerly Regional VP of Sales for SFX Broadcasting and GSM of WSIX and WRVW in Nashville. Most recently she has been a sales growth consultant in professional services and financial products.
Hill upped at CBS
Joanne Hill has been named Vice President of Marketing, CBS Radio, where she has been Director of Marketing since 2005. The appointment is effective Tuesday, September 5. In this new role, effective September 5th, Hill will lead development and execution of CBS Radio's branding and advertising campaigns, digital marketing efforts, as well as oversee station marketing strategy and implementation. In addition, she will collaborate with the extensive team of dedicated marketing and sales specialists that form CBS Radio's Altitude Group.
New lineup in Sacramento
With KXCL-FM "Flash 92.1" now covering the Sacramento metro with increased power, Jeff Jenson has joined the First Broadcasting station as morning host. Jeff Andrews comes aboard as PD and afternoon host. Susan Wright remains in mid-days and Dave Diamond has joined the station for evenings and weekends.
New boss for the SEC
Former Univision TV manager Diego Tomás Ruiz, who since January has been Deputy Chief of the Office of Strategic Planning and Policy Analysis at the FCC, is now moving to the top staff job at the Securities and Exchange Commission. He is now Executive Director of the SEC.
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More News Headlines
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Cumulus signs with Metro Source
Westwood One's Metro Networks announced today a multi-year agreement with Cumulus Media, effectively affiliating every Cumulus radio station with the Metro Source newswire service. Effective October 2006, the agreement impacts more than 320 radio stations, of every format, in more than 60 markets nationwide.
Radio Disney joins iTunes lineup
Radio Disney is now available via streaming live broadcasts on the iTunes Radio Tuner, in the "Top 40/Pop" section. The 24-hour, kid-driven radio network is also heard on over 50 stations in the U.S. and in the United Kingdom, Japan and most of South America. In the US, Radio Disney is also available on XM and Sirius satellite radio, digital cable television's Music Choice channel, an on-demand music channel on Verizon/VOD, on XM/DirecTV and on RadioDisney.com.
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Download Now
July '06 RBR/TVBR Solutions Magazine
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RBR Radar 2006
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Radio News you won't read any where else. RBR--First, Accurate, and Independently Owned.
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The bloom is off the satellite rose
Both XM and Sirius have seen their stock prices plunge this year, but traders seemed not to react to a negative front page article in the Wall Street Journal. The WSJ story detailed problems with churn, possible receiver recalls and high talent/programming costs - issues that RBR readers are quite familiar with. In fact, it appears that the problems plaguing the satellite radio companies are already well known in the financial community. Warning that a potential time bomb is awaiting Sirius - all of those one-year subscriptions from the holiday season last year as Howard Stern prepared to move to satellite are about to come up for renewal. Can Sirius keep those subscribers and not see its churn rate jump?
08/16/06 RBR #159
HD Digital Radio Alliance
names next 18 HD-2 markets
programming this fall, marking the third wave of stations rolling out side channels under the Alliance's format-selection program. This latest wave will launch 140 additional HD2 channels and brings the total markets served by HD2 multicast programming to 68, all of which are in the top 100 markets In total, more than 600 radio stations nationwide belonging to Alliance members now offer HD2 multicast programming. See the 18 markets here
08/16/06 RBR #159
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State Broadcast Association
President for one of the nation's top broadcast associations seeks a replacement for its retiring executive. Applicants must have broadcast management experience; knowledge of broadcast governmental, legal and regulatory affairs; an awareness of small and medium market broadcaster needs; ability to plan and coordinate a convention, workshops, seminars, and solicit event sponsors. Must have excellent verbal and written communication skills.
See Radio Careers
Talk Radio Network
Seeking professionals in three areas to join our TRN team. First: Executive Producer on topical subjects, Second: Board Operator with 2 years experience with Telos call-screening software and Third: Staff Engineer that can take initiative. This is a fast paced high pressure environment, must be able to think and act professionally in emergency situations. EOE. For complete details all three positions
See Radio Careers
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