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Volume 23, Issue 164, Jim Carnegie, Editor & Publisher

Wednesday Morning August 23rd, 2006

Radio News ®

Perenchio hoping for big
Univision sale vote turnout
Proxies are being mailed out inviting Univision shareholders to a September 27th special meeting to vote on accepting the 13.7 billion buyout offer (36.25 per share) from the group headed by Haim Saban. 60% approval is required and shares not voted are counted as "no" votes, so Jerry Perenchio is pushing for a strong turnout. "The failure to vote has the same effect as a vote against adoption of the Merger Agreement," Univision noted in the materials being sent to shareholders. Perenchio and his associates have signed a voting agreement to cast their votes in favor of the buyout, but since his shares, which carry 10 times the voting power of regular shares for most matters, don't have any super-voting rights when it comes to selling the entire company, they account for only about 11.5% of the total votes in this case. By contrast, Televisa and Venevision, whose directors voted against the sale, control 15.7% of current shares outstanding and could increase that to over 25% if they were to exercise all of their stock warrants. So, voter turnout could prove to be important. Perenchio and Univision management need to be sure that another 48.5% of Univision's shares are actually voted in favor of the deal.

RBR observation: Those shares are spread far and wide. Besides Perenchio, Televisa and Venevision, Univision has no other shareholder with a stake of 5% or more. According to the prospectus, a Goldman Sachs investment fund, Goldman Sachs Asset Management, has reported to the SEC owning 4.1%, so it may be the next largest shareholder. One way to look at the math, if we assume that Televisa and Venevision will continue to oppose the deal and vote "no," at least 75.7% of all outstanding shares will have to be voted, and all of the rest "yes," in order to clear that 60% acceptance hurdle. One note: That math could all change if Televisa cuts a deal to sell Saban & Co. its stake before the September 27th meeting. As of August 17, 2006, there were 306,206,334 shares of Univision common stock outstanding held by approximately 424 holders of record, the company said in the proxy.

Station goes nuclear
in upgrade attempt
Alexander Broadcasting has found a novel underpinning for an upgrade argument. The company owns and operates WRCR-AM in Spring Valley NY up the west side of the Hudson from New York City. It's in Rockland County, which is also home to the Indian Point nuclear energy plant. The plant is a potential terrorist target. WRCR is said to be the main station providing truly local programming to the county, which is otherwise well within the broadcast footprint of New York City, picking up many stations with bigger fish to fry. The problem will come if indeed there is a pressing need to broadcast local emergency information. Currently heard on 1300 kHz, the station only has 500 watts during the day and a mere 83 watts at night, both off a directional array, which Alexander doesn't think will cut it when push comes to terror. It had applied to move to the expanded band at 1700 kHz during the Auction No. 84 AM free-for-all, but EB stations weren't considered in that proceeding, and its request for a waiver was denied. On second consideration, and with bipartisan support from politicians with a stake in the area, the FCC has decided that there is merit to putting a local signal in Rockland County. The catch, and Alexander was fully prepared for it, is that the 1700 permit will have to go through normal allocation procedures. The successful applicant will have to choose a CP that covers at least half of the Indian Point Emergency Planning Zone, will have to be approved for full EAS carriage.

RBR observation: Pretty crafty. But before you run out and start looking for potential terrorist attractions upon which to pin your own upgrade attempt, we'd have to think that this confluence of circumstance is relatively rare. The voices from the Big Apple drown out a lot of the surrounding areas, but there is only one Big Apple.

Analysts mostly positive on Entercom buys
Wall Street is skeptical of any radio company that is acquisition-minded these days, but analysts are generally positive about the deals Entercom announced Monday to buy 15 stations from CBS and one from Radio One for a total of 293 million (8/22/06 RBR #163). They say the pricing was right and the additions mostly build existing clusters. At Bear Stearns, Victor Miller says he is penciling in a million bucks a year in cluster efficiencies for Entercom and also expects the company to get about 30 million, give or take, for the two FMs it has to divest in Rochester. Since the stations to be sold contribute little or nothing to EBITDA at present, Miller sees a "buyer's multiple" of 11.3-11.6 times. On the sell side he also sees a win for CBS selling for 13.8-13.9 times and a win for Radio One as well in beginning its announced plan to sell off 100-200 million in assets. At Wachovia, analyst Marcia Ryvicker also likes the pricing for Entercom, agreeing that it works out to something in the 11 times range after taking into account synergies and the divestitures. "Taking this one stop further, the tax-adjusted multiple (which includes the net present value of resulting tax shields) is 8.5 times 2006 estimated EBITDA - well below Entercom's current 10 times public valuation," she told clients. At least one analyst, though, is warning of challenges ahead for Entercom to justify its station buys. "The current dynamics of the M&A market have made pursuing an acquisition-fueled growth strategy challenging. That said, Entercom has a solid track record of integrating accretive acquisitions over a longer time frame - as evidenced by its sector high 9% ROIC. That said, with soft 2Q results and a still challenging second half 2006 industry outlook, Entercom will likely have to initially focus on expenses in order to drive EBITDA margins at the acquired stations from the low 30% range closer to the company's historic average of about 38%," said Mark Wienkes at Goldman Sachs. Analyst Anthony DiClemente at Lehman Brothers also sounded a note of caution about the station buying move. "We are slightly cautious that Entercom has temporarily turned to consolidation in lieu of share repurchases, a less desirable alternative in our view, given low relative returns of radio station acquisitions over the past five years, in general. Planned synergies may prove difficult to achieve in context of challenging ongoing conditions of the radio business," he said.

More signs of a banner political year
TNS Media Intelligence's Campaign Media Analysis Group is keeping track of that most seasonal of advertising categories, political, and in keeping with all the tea leaves and crystal ball readings that have preceded them, CMAG is finding record amounts of money being spent on advertising in support of both issues and candidates. YTD, 311M has been spent already, a figure CMAG calls "stunning." And that's just for local television, and it constitutes a 150% increase over the comparable period in the last midterm of 2002. The battle for Congress is generating much of the heat. Advertising related to federal office amounted to a relatively modest 6.5M in Q1, but surged to 83M Q2, and only figures to get hotter as we move toward November. Although senate races usually involve the biggest warchests, so far the battle to finish the term of convicted Representative Duke Cunningham (R-CA) is the spending leader at 13M, with a rematch of the same candidates on the card for November. CMAG counts 44M in spending in the early stages of Q3 on certain senate races. Hot spots are said to include Pennsylvania, Maryland, Arizona, Michigan, Nebraska, Virginia, Rhode Island, Vermont and Washington. Big bucks is flowing in battles over governorships and ballot issues, with California spending expected to total 300M on its own by Election Day. Big governor battles are also expected in New York, Illinois, Michigan, Georgia, Florida, Ohio and Texas. And its not just TV getting the action. CMAG noted, "Local cable, radio and the Internet have also seen gains in ad spending because of their ability to closely target voters, which has tightened inventory levels in many of the battleground stations in 2006..."

Ad Business Report TM

Woo agency launches
effort for DISH Network
Woo Agency is launching a multimedia ad campaign for DISH Network and their total football package. Celebrating the start of the 2006 NFL season, the national campaign features prominent NFL player Tiki Barber throughout the brand's television, radio, and print advertising, championing the rallying cry, "I want football 24/7." This campaign will also be integrated on a local level in key markets using regional NFL stars including Dallas Cowboys' Drew Bledsoe, Tony Gonzalez of the Kansas City Chiefs, and Marvin Harrison of Indianapolis Colts fame. Woo was responsible for all creative, from television, radio and print, as well as guerilla tactics including street teams and upcoming local events.

DISCUS issues latest report on
advertising, marketing complaints
The Distilled Spirits Council released its fourth semi-annual public report covering 1/1-6/30 2006, outlining complaints about industry advertising and marketing, actions taken by the industry's advertising compliance review board, and the response by each advertiser. The report includes six complaints about the content or placement of advertising and marketing materials that ran in the first half of 2006. Of the six complaints, three were found in violation of the spirits industry's 70-year-old Code of Responsible Practices for Beverage Alcohol Advertising and Marketing by the Code Review Board.
| View the entire fourth edition Code Report |

One ad that stood out in content violation, and where action was taken, involved Diageo's Baileys Irish Cream "Ice Bucket" broadcast TV ad. The complainant describes the ad as depicting a man pouring Baileys Irish Cream into an ice bucket, inserting a single straw into the drink and joining his friends on the sofa to consume his serving, apparently ignoring a request to share the drink. The complainant believes the ad violates Responsible Content Provision No. 13 of the DISCUS Code: "Beverage alcohol advertising and marketing materials should not depict situations where beverage alcohol is being consumed excessively or in an irresponsible manner" and Responsible Content Provision No. 19: "Beverage alcohol advertising and marketing materials should not be associated with anti-social or dangerous behavior." The Code Review Board found the advertisement in violation of Responsible Content Provision No. 13. The advertiser immediately took steps to pull the advertisement in question and discontinued the Baileys execution subject to the complaint.

Washington Media Business Report TM

FTC chair not worried about neutrality
The Chairman of the Federal Trade Commission sees legislation guaranteeing Internet network neutrality as unnecessary. According to ZDNet.com, she told a gathering at a Colorado think tank event that market forces would prevent any abuse, and that consumers themselves would enforce access to a wide open Internet in which they would continue to be free to explore without restriction. Her remarks were similar to those expressed by FCC Commissioner Robert McDowell when meeting with reporters last month. Both the FCC and FTC claim jurisdiction over aspects of the Internet, and McDowell said the FCC certainly had the power to swoop in and correct abuses if any occur. But he contended it was premature to regulate until market forces have a chance to do the work naturally. Proponents of network neutrality, who are opponents of Ted Stevens' proposed legislation on the topic, argue that most consumers do not have competing Internet providers, leaving them no leverage with which to punish or reward providers.

RBR observation: It will be interesting to see if this goes anywhere in the short time left to Congress before the final push toward Election Day.

Media Markets & Money TM

Wilkins expands into Pensacola
Robert Wilkins, under legal name Pensacola Radio Corporation, is buying Cantonment FL station WNVY-AM from Michael Glinter's 1090 AM Inc. The pricetag is 430K cash. It will be the 13th part of the Wilkins Communications Network Inc., which also includes WIJD-AM in nearby Mobile AL. Like WNVY, that station came from Glinter, for 450K. Wilkins tells RBR he closed on the Mobile station last month. He'll run WNVY in an LMA until closing.

Programming Business Report

The explosion of Hispanic formats and networks
Yesterday, we discussed radio and programming to the assimilated (8/22/06 RBR #163). One hot topic right now in Spanish-language radio is whether broadcasters are instructing their air talent to market in English or Spanglish or to be purist about Spanish. Says a Univision Radio source: "An 18-34 format in first generation could be all Spanish, regional Mexican or Spanish AC. It's second generation where we've had this big burst of Reggaeton. That's a bi-lingual format, just as the listener speaks both English and Spanish. Then we have stations like The Beat in San Antonio that are Hip-Hop-all English with maybe 10% Spanish thrown in." However, the language issue can be a bit of a problem on the agency side. Most of the Spanglish stations are an 18-34 buy, Spanish, but it's bi-lingual. "So it's kind of hard to tell an advertiser who asks, 'Wait a minute-are you English or are you Spanish?'," recalled a Univision Radio PD. "That niche is very different because if you go to a Spanish shop and they'll say, 'No it's too English.' If you go to an English shop they'll say, 'No it's too Spanish.' So it's really hard to get people to understand what that audience is all about."

Keeping listeners listening
What are Spanish-language stations doing to keep listeners from migrating over to the pure Urban or Pop Rock stations where the young focus? Bustos claims the young Hispanic listeners are already listening in huge numbers to those general market formats. "What we try to do is simply bring them back for a few quarter hours. Younger listeners have a greater tendency for 'hopping' from one station to another. Each format fills and satisfies a portion of the young consumers' personality." The goal for many is to take listeners away from general market stations. For example, Urban "The Box" in Houston pretty much had every Urban CHR listener in the market-double-digit 18-34 numbers. "Hispanics were listening to The Box because there really wasn't anything else for them in the way of a rhythmic format," explained a Univision Radio source. "So we saw an opportunity and signed on The Party in Houston [Latin Urban]. We specifically targeted those Hispanics that were listening to The Box and found out that there were truly different tastes that they had in the way of Urban music and CHR. We're hoping it keeps them away from the Urban formats because they include the real heavy, syrupy R&B, which doesn't work for Hispanics." As well, in the CHR world there has been a ton of Hispanic artists busting onto the scene-Baby Bash and Frankie J. "These artists that have broken out of Texas have broken at our stations," he said. "Those artists really don't do well on Urban stations. They are basically more CHR mainstream and/or Hispanic-focused." Says David Haymore, currently running Latino 96.3 (Reggaeton/Urban Latino) in LA for SBS: "In May of last year, we launched Latino 96.3 as a station targeting the youth of LA with a bilingual format and presentation. It rocketed to the number two most listened to radio station after only three months on the air. Interestingly, the popularity of the station was a likely catalyst to another local station dropping their Hip-Hop format in favor of R&B."

Tomorrow: Serving Hispanic viewers. On the Television side, a proliferation of Hispanic television stations in the last 15 years have brought on new networks to provide content.

Entertainment Media Business Report TM

XM to the rescue!
That is how the satellite radio company is positioning itself in the Los Angeles, after KZLA flipped and left LA without a Country station. "XM rescues Country music" it announced, as XM stepped in to "replace now-defunct KZLA-FM (93.9) as sponsor for Los Angeles ' largest country music festival 'Country Bash '06,' which is scheduled to feature Gretchen Wilson, Phil Vassar and SHeDAISY. The event will be held October 14 at the Verizon Wireless Amphitheater in Los Angeles." Seizing an opportunity, XM is out to grab new subscribers who no longer have a local radio option playing the music they want to hear. "By sponsoring Country Bash '06, XM is sending a message loud and clear to country fans in Los Angeles and across the country: XM Radio loves country music, and XM is the best place for you to hear country music," said XM Exec. VP of Programming Eric Logan.

Internet Media Business Report TM

"Today" makes live concerts
available via iTunes
NBC News announced it will for the first time offer one of "Today's" summer concerts on the iTunes Music Store. "Today's" Friday, 8/25 John Mayer live concert will be made available in its entirety - along with some special behind-the scenes footage - as part of "NBC News On Stage," which debuts on iTunes 8/29. In addition to the Mayer concert, the new "NBC News On Stage" section on iTunes will include extended conversations with some of the biggest legends of the music world from the NBC News archives. The initial list include The Rolling Stones: The Matt Lauer Interview; Grateful Dead: Jerry Garcia Speaks, Volume One; Madonna: The Jane Pauley Interview; U2: The Rona Elliott Interview; Cash Talk: Johnny and June Carter Cash; Ray Charles: The Rona Elliott Interview; and Judy Garland: The Barbara Walters Interview. NBC News on iTunes was launched three months ago, and also features a wide selection of current and historical programming. NBC News programs on iTunes are priced at 1.99 per download; The John Mayer video, featuring three songs, an interview and behind-the-scenes footage is priced at 3.99 per download, and will be available for a limited time.

Transactions

17M WCWN-TV Albany-Schenectady-Troy NY (Schenectady NY) from WCWN LLC, a subsidiary of Tribune Broadcasting Company (Dennis FitzSimons) to Freedom Broacasting of New York Licensee, a subsidiary of Freedom Communications Inc. (Doreen D. Wade). Cash. Duopoly with WRGB-TV. Freedom is seeking failing station waiver to own both stations in the market. WCWN is a WB-heading-to-CW affiliate, WRGB is a CBS affiliate. [File date 7/31/06.]

125K KFVR-FM La Junta CO from Superior Broadcasting of Denver LLC (Bruce Buzil) to Greeley Broadcasting Corp. 10K escrow, balance in cash at closing. [File date 7/28/06.]

Stock Talk

Fed talks mixes up market
Chicago Federal Reserve President Michael Moskow said the Fed might have to do some more rate raising, which gave pause to Wall Street traders. The Dow Industrials slipped five points to 11,340, but the Nasdaq Composite and S&P 500 were up slightly - a classic mixed market.

Radio stocks didn't move much. The Radio Index was up 0.281, or 0.2%, to 134.765. Among the bigger movers were CBS and Radio One, a day after selling stations to Entercom. CBS (Class B) rose 1.7%, Radio One (Class D) gained 1.4% and Entercom was down 0.6%. Saga had the best day, up 2.6%.

Radio Stocks

**Here's how stocks fared on Tuesday**
Company	Symbol	Close		Change	Company	Symbol	Close		Change
Arbitron	ARB		35.62	+0.21	Hearst-Argyle	HTV		21.84	-0.10
Beasley	BBGI		6.99	-0.02	Journal Comm.	JRN		10.74	+0.07
CBS CI. B	CBS		28.18	+0.47	Lincoln Natl.	LNC		59.85	-0.29
CBS CI. A	CBSa		28.12	+0.43	Radio One, Cl. A	ROIA		5.82	+0.08
Citadel	CDL		8.69	-0.01	Radio One, Cl. D	ROIAK		5.84	+0.08
Clear Channel	CCU		28.10	+0.13	Regent	RGCI		4.02	-0.08
Cox Radio	CXR		15.14	unch	Saga Commun.	SGA		7.39	+0.19
Cumulus	CMLS		9.61	+0.01	Salem Comm.	SALM		10.72	-0.21
Disney	DIS		29.64	-0.33	Sirius Sat. Radio	SIRI		4.03	+0.14
Emmis	EMMS		12.11	+0.06	Spanish Bcg.	SBSA		4.30	-0.03
Entercom	ETM		24.30	-0.15	Univision	UVN		33.92	+0.30
Entravision	EVC		6.96	+0.03	Westwood One	WON		6.99	+0.03
Fisher	FSCI		40.02	-0.01	XM Sat. Radio	XMSR		13.52	+2.28
Gaylord	GET		41.94	+0.23	-	-	-	-	-

Bounceback

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Below the Fold

Ad Business Report
DISCUS issues latest report
On advertising, marketing complaints...

Media Markets & Money
Wilkins expands into Pensacola
Buying Cantonment FL station WNVY-AM...

Washington Media Business Report
FTC chair not worried about
Neutrality, sees legislation guaranteeing Internet network neutrality as unnecessary...

Internet Media Business Report
"Today" makes live concerts
Available via iTunes at 1.99 each called Selling the Content...

Programming Business
Hispanic formats & networks
Hot topic instructing their air talent to market in English or Spanglish...

Arbitrends

Radio Media Moves

Calococci
gets Power
Former KKBT-FM Los Angeles PD Tom Calococci has been named Operations Manager of WPOW-FM "Power 96" Miami, owned by Beasley Broadcasting Group. He will report to GM Matthew Bell and work with PD Ira Wolf.

Taylor to Magic
Greater Media announced that Troy Taylor has joined the company as Local Sales Manager of WMJX-FM "Magic 106.7" Boston. He was previously an AE with Clear Channel in Boston and Louisville.

More News Headlines

XM drops MSNBC
MSNBC trails badly behind Fox News Channel and CNN in the world of 24/7 cable news, so it is not terribly surprising that XM Satellite Radio is dumping the MSNBC audio feed next month. The Daily Kos website reported that fans had started an online petition demanding its return. RBR checked and found that the petition, as of midday Tuesday, had been signed by 73 people. XM will still carry Fox News, CNN, CNN Headline News, CNN en Español, ABC News/Talk, BBC World Service and several other News or News/Talk audio channels.

Bob Costas
returns to radio
Clear Channel Radio announced that after 10 years, Bob Costas is coming back to radio. The two-hour weekend show, "Costas on the Radio," will feature various newsmakers and significant figures. There will also be two editions of a 60-second daily vignette, "The Costas Cuts" and "The Costas Minute." "Costas on the Radio" launches 9/16.

TVBR - TV News

Supremes turn
deaf ear to EchoStar
DBS video entertainment provider EchoStar will have to abide by the provisions of the Satellite Home Viewer Improvement Act and cease the importation of distant network signals into markets where they are otherwise available from local sources. EchoStar had its pleadings shot down at the Eleventh Circuit back in May, and now has failed to get an emergency Supreme Court injunction staying that court's ruling pending an appeal to the highest court. The original suit against the DBS MVPD was brought by the big four television networks. The Eleventh Circuit judge, William Dimitrouleas, was particularly firm in his opinion (5/25/06 TVBR #103), saying, "As if the magnitude of its ineligible subscriber base were insufficiently disconcerting, we have found no indication that EchoStar was ever interested in complying with the Act. Indeed, based on the district court's findings, we seem to have discerned a 'pattern' and 'practice' of violating the Act in every way imaginable." According to the Wall Street Journal, EchoStar has until 10/17/06 to file a Supreme Court appeal, with a ruling coming sometime well beyond that date. NAB President and CEO David K. Rehr hailed the original court ruling, saying, "This opinion affirms the importance of localism in television, and vindicates an eight year effort by TV broadcasters to stop EchoStar's blatant and massive abuse of copyright law."

RBR Radar 2006

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

CC settles 'Shellhammer suit'
Clear Channel confirms to RBR the company has settled a class action lawsuit (known as "Shellhammer suit") in San Francisco Superior Court relating to claims for overtime and expense reimbursement by a proposed class of current and former account executives in California. "The settlement occurred before trial, there was no judgment, and Clear Channel did not admit liability," a company spokesperson said. We heard the settlement was for 22 million, but could not get a confirmation. The settlement included a full gag order, so read the details in
08/22/06 RBR #163

Fox buys up the blinks
Clear Channel Radio and Fox Broadcasting announced a first-of-its-kind national radio campaign that uses "blinks," the shortest-length radio spots available. "Blinks" will be used to support the fall season premieres of Prison Break, House and The Simpsons. Conceived by, and running exclusively on, 1,100 CC Radio stations, "the first "blinks" - running every hour from 6 a.m. to 7 p.m. Kaye Bentley, Fox Broadcasting SVP, tells RBR they chose the blinks because they've got iconic shows like The Simpsons, House and Prison Break. "We figure at this point it's just a tune-in message, a real quick 'tonight-tonight-tonight' message.

RBR observation: Good move on the part of Clear Channel and Fox. Now this is how a Blink should be used. Listen to the audio Blink spots only in RBR as we have the Audio Content. See Ad Business Report section in
08/22/06 RBR #163

RBR News Analysis
Waiting for more shoes to fall
Clear Channel Radio CEO John Hogan indicated in his memo announcing three Executive Vice Presidents of Operations who have split up the country that more changes are coming. That has created a buzz within the company about just what else will change. One rumor heard repeatedly is that several Regional Vice Presidents are going to keep their titles but effectively be demoted - having to personally run a local market (after firing the current market manager) and oversee only smaller markets, while the large market managers will report directly to their new Exec. VP of Operations. If that happens, see this RBR for details
08/21/06 RBR #162

Cox has more than one
quiet deal up their sleeve
Cox Radio has more than one deal in the works that it is keeping quiet about, but has to report, at least in vague terms, in its quarterly SEC filings. These quiet deals have been noted in those quarterly filings for five straight quarters, but haven't yet been executed and Cox hasn't identified the stations or sellers involved. What little is known is this: Want to read see
08/21/06 RBR #162

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: Executive, Board Operator with 2 years experience and Staff Engineer that can take initiative. EOE. For complete details all three positions
See Radio Careers

General Manager
Saga Communications has a rare opening at Rock 102 and Lazer 99.3. Excellent facilities, benefits and quality of living in Springfield, MA. EOE.
See Radio Careers

Hard finding that key person
to fill the important position at your organization? Media HeadHunters is the place that key media firms use to get results. See Media HeadHunters and get results with service--Period.

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