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Welcome to RBR's Daily Epaper
Volume 24, Issue 170, Jim Carnegie, Editor & Publisher
Thursday Morning August 30th, 2007

Radio News ®

XM director puts his money on the line
Jeffrey Zients, who has served on the board of directors at XM Satellite Radio since May 2006, has demonstrated his confidence in the company’s future, buying 270,000 shares of stock. According to his SEC filing, the shares were purchased this month at prices ranging from 1.05 to 11.20. At the average price of 11.14, that’s just over three million bucks – the largest insider stock buy since XM’s IPO in 1999. What made Zients so bullish? The Wall Street Journal speculates that it was a federal judge’s refusal to let the Federal Trade Commission block the merger of Whole Foods Market and Wild Oats Markets on antitrust grounds. That has created buzz in the markets that the merger of XM and Sirius, the only two satellite radio companies, is also likely to pass muster.

RBR observation: You do not get to choose your judge when you go to federal court, so unless XM and Sirius are lucky enough to draw Judge Paul Friedman, if and when the US Department of Justice Antitrust Division files suit to block an XM-Sirius merger, getting the same outcome is a long-shot. Friedman’s decision in the organic grocery merger is at odds with decades of antitrust law precedents and is likely to be overturned on appeal. The FTC and DOJ split responsibilities for antitrust reviews, but they use the same criteria. An off-beat ruling by a single judge isn’t going to change how they look at antitrust cases.

Shake up at EMI
Now that Terra Firma private equity group has completed its buyout of EMI Group, CEO Eric Nicoli is being shown the door, along with CFO Martin Stewart. Chris Rolling, a managing director of Terra Firma, is now COO of EMI Group and CFO of both EMI Group and EMI Music. Also, Ashley Unwin from Terra Firma has been named Director of Business Transformation of both EMI Group and EMI Music. Staying on board as Chairman and CEO of Music Publishing is Roger Faxon.
Terra Firma head Guy Hands has put in place a new governance structure for the record company, with himself as chairman of the new supervisory board, joined by other Terra Firma senior executives. “The new management structure will allow EMI to benefit from Terra Firma’s experience in strategically transforming businesses and driving operational change. The initial focus will be to maximize the value of the significant assets in EMI’s publishing business and to realize the digital opportunity in recorded music,” Hands said in a statement. “We will invest in the business to ensure that it grows both organically any by acquisition. The goal is for EMI to be the world’s most innovative and consumer-focused music and the best home for musical talent,” he continued.

News Corp’s Dow Jones buy clears antitrust review

News Corporation’s pending acquisition of Dow Jones & Company has easily cleared antitrust review by the Federal Trade Commission, winning early termination of the legal waiting period. A joint statement says the companies expect the deal to close in Q4, following shareholder approval. Some other routine regulatory approvals have to be obtained and the parties have to sign the editorial agreement, designed to protect the editorial integrity of the Wall Street Journal, which was the most contentious part of the sale negotiation.

RBR observation: Despite the statement by FCC Commissioner Michael Copps that this is “no slam dunk,” no FCC approval is needed, so it pretty much is a slam dunk. There were clearly no antitrust issues – we can’t think of a single business where News Corporation and Dow Jones are direct competitors – so it sailed through the FTC review.

Hearst-Argyle investor demands higher price
Marathon Partners has sent a letter to Hearst-Argyle Television directors insisting that they not agree to “an embarrassingly low tender offer” from Hearst Corporation to buy out public shareholders. Although the stock had sunk recently, the letter notes that Hearst-Argyle was above the 23.50 per share offer for 83% of the past year. “It is absolutely clear that the current offer does not fairly compensate the shareholders of HTV for the unique and valuable assets the company controls. I strongly urge you to reject the 23.50 offer outright,” wrote Mario Cibelli, Managing Member of Marathon, which owns more than 90,000 shares of Hearst-Argyle. He quoted from past Wall Street conference calls where Hearst-Argyle CEO David Barrett said that the company’s stock was undervalued. And Cibelli noted how time and again over the years Hearst Corporation had purchased Hearst-Argyle stock on the open market for prices above the 23.50 per share it is now offering. The letter doesn’t state a price that would be fair to minority shareholders and Cibelli says he is not in any hurry to sell. “I have not found a sudden need for liquidity nor do I find the offer price attractive,” he noted.

Ad Business Report TM

Damon's Grill launches new radio effort
With the fall sports season about to kickoff, Damon's Grill wants to make sure enthusiastic fans never get carried away and go topless. So the sports-themed casual dining chain's latest limited time offer features three new specialty steak and chicken toppers. The new radio commercials continue the "Ask Damon's Grill" theme launched earlier this year, in which a radio host provides advice to callers. In the latest spot, the host advises an avid sports fan who threatens to show up bare-bellied in body paint to avoid going topless and order the new toppers. The promotion, which launched this week, also includes newspaper inserts, in-restaurant merchandising and emarketing. "Our Toppers event is designed to offer new and exciting flavors, starting at the very affordable price of 10.99," said Jon Quinn, VP/Marketing. The promotion ends 10/21.

Visa to consolidate buying
Visa has begun a review to consolidate its global buying account. Visa spent 417.8 million in marketing in the U.S., according to Ad Age's Leading National Advertisers report. Visa has tapped EMM Group, London, an enterprise-marketing management firm, to oversee the review. Incumbent holding companies invited to participate in the pitch include Publicis Groupe, Omnicom Group, WPP Group and Aegis. The review does not include creative.

Media Markets & Money TM

Armada adds eight in Kansas
Fast-growing Armada Media has a deal to buy eight stations in Western Kansas from the family of the late Bob Ingstad for 9.5 million. Brokers Jody McCoy and Tom McKinley say the deal includes KBUF-AM Holcomb, KKJQ-FM Garden City, KSKZ-FM Copeland, KSSA-FM Ingalls, KSKL-FM Scott City, KWKR-FM Leoti, KULY-AM Ulysses, and KFXX-FM Hugoton. Darn it all, we weren’t able to use the headline “Armada sails into Kansas,” since the company, with Jim Coursolle as Chairman and Terry Shockley as CEO, already owns KFNF-FM Oberlin, KS.

Citadel spin lands at Saga
One of the stations placed in the Last Bastion Station Trust, run by broker Elliot Evers, to facilitate Citadel’s acquisition of ABC Radio has found a home with Ed Christian’s Saga Communications. Saga is buying WCLZ-FM Brunswick, ME for three and a half million bucks. The acquisition will take Saga to the max in the Portland, ME market – three AMs and four FMs.

Jupiter moves to the Valley
Diane Burns and her Jupiter Communications Corporation are spinning out of Dallas via the sale of KWIP-AM to Valley Broadcasting Associates. This would, of course, be a bigger story if we were talking about Dallas TX. But we're not – KWIP is in Dallas OR, west of Salem, which is well to the south or Portland. The buyer, headed by Ayesh Shanah, will pay 850K for the station.

Internet Media Business Report TM and CondeNet strike content partnership and CondeNet announced a content partnership that will enable to feature a broad range of CondeNet's leading lifestyle content and reporting and extend the reach of its popular brands. The partnership includes features from its portfolio of online brands as well as from Conde Nast publications. The CondeNet brands that will share content with include,,, and Content from Conde Nast's publications, such as Vogue, Glamour, Self, GQ, Details, Men's Vogue, Vanity Fair, Gourmet, Bon Appetit, Conde Nast Traveler, and Conde Nast Portfolio will also be available on The content will be featured in's health, entertainment, business, travel, and TODAY sections.

Washington Media Business Report TM

ACLU blasts FCC censorship
The American Civil Liberties Union blames the FCC for making some public television stations fearful of running the Ken Burns documentary “The War” because of four expletives in the 14-hour series. The ACLU charges that is due to the Commission’s “vague and inconsistent” standard for broadcast indecency. "To impede the First Amendment rights of those who fought and died for those very rights is reprehensible. Our public broadcasters should not be afraid to air fourteen hours of an educational and fact-based documentary because of a handful of profanities. Images of the brutality of war are far more disturbing than any four letter word,” said Caroline Fredrickson, Director of the ACLU’s Washington Legislative Office. "This clearly settles any question about the chilling effect of the FCC’s vague and contradictory indecency regime. Broadcasters should not have to guess whether or not a work is ‘indecent,’ and face substantial fines if they guess wrong. When it comes to what we allow our children to see on television, parents must be the first line of defense – not the government," she continued.

RBR observation: Sounds like what we have been saying for years.

Entertainment Media Business Report TM
Sirius sets day, channel for Grateful Dead Channel launch
Sirius Satellite Radio announced the launch of the highly anticipated Grateful Dead Channel. The channel will include rare and unreleased performances, original shows hosted by Grateful Dead founders Bob Weir, Phil Lesh, Mickey Hart and Bill Kreutzmann, as well as rare archival interviews with Jerry Garcia. It will make its debut 9/7 at 12 pm ET on Channel 32 with a rare concert broadcast of the band’s 1974 performance at the Hollywood Bowl. This performance will be followed by a special show hosted by Bob Weir, the first by a member of the Grateful Dead on the new channel. The channel will also feature contributions from Grateful Dead expert David Gans, as well as Dead archivist David Lemieux, who will provide a unique look into the Dead’s lush past with daily insights.


350K WQSA-FM Macon GA (Unadilla GA) from Toccoa Falls College (Wayne Gardner) to Georgia Eagle Broadcasting Inc. (Joe Sam Robinson Jr, Cecil P. Staton). 17.5K escrow, balance in cash at closing. Superduopoly with WNNG-AM Warner Robins, WCEH-AM/WRPG-FM Hawkinsville, WQXZ-FM Pinehurst GA, forming three markets. LMA 11/1/06. [File date 8/6/07.]

210K WJNF-FM Marianna FL from Marianna Educational Broadcasting Foundation Inc. (Jack Hollis) to WAY-FM Media Group Inc. (Richard D. Augsburg et al). Cash. Noncommercial station. [File date 8/6/07.]

Stock Talk

Big Ben boosts markets
Traders bought stocks after a letter was made public from Fed Chairman Ben Bernanke to Sen. Chuck Schumer (D-NY) assuring the lawmaker that the Fed was "prepared to act as needed" if turmoil in the financial markets begins to harm the broader US economy. The Dow Industrials surged 247 points, or 1.9%, to 13,289.
Radio stocks joined the parade, with traders scooping up bargains. The Radio Index gained 3.235, or 2.6%, to 126.385. Leading the pack was Entercom, up 5.8%, with Westwood One gaining 5%, Emmis up 4.9%, Fisher gaining 4.7% and Cox Radio up 4%.

Radio Stocks

Here's how stocks fared on Wednesday

Company Symbol Close Change Company Symbol Close Change




















Journal Comm.







Lincoln Natl.




Citadel CDL
4.23 0.10

Radio One, Cl. A




Clear Channel




Radio One, Cl. D




Cox Radio












Saga Commun.




Debut Bcg.




Salem Comm.








Sirius Sat. Radio








Spanish Bcg.
















Westwood One








XM Sat. Radio





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Below the Fold

Ad Business Report
Damon's Grill launches
New radio effort with the fall sports
season about to kickoff new radio commercials continue the question…

Media Markets & Money
Armada adds eight in Kansas
H a deal to buy eight stations in Western, KS from the family of the late Bob Ingstad for…

Washington Media Business Report
ACLU blasts FCC censorship
Blames the FCC for making some public stations fearful of running the Ken Burns documentary...

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Radio Media Moves

Rosso heading up Citadel Interactive
Citadel Broadcasting announced the appointment of John Rosso to Senior Vice President in charge of all Citadel Interactive platforms including those of ABC Radio Networks. In his new role, John will focus on expanding Citadel’s digital initiatives including Citadel’s current National platform of around 300 local and national websites and over 200 streaming stations. “This is a great opportunity for John,” said Farid Suleman, Citadel CEO. “His knowledge of the radio business will be invaluable in exploiting the synergies between traditional media and new media. John most recently was responsible for re-launching ABC Radio Networks websites and consolidating them into a national advertising platform with industry standard ad units, technology and accountability. John will extend his expertise across all of Citadel’s interactive businesses, improving the experience for our users and giving our clients a growing menu of marketing options.”

Upped at ABC Radio
TJ Lambert has been promoted to Sr. VP, Affiliate Relations, at Citadel’s ABC Radio Networks, with responsibility for distribution and affiliation of all network programs and services. A 14-year veteran of ABCRN, Lambert was previously VP, Affiliate Relations, for ESPN, ABC Music Radio and ABC Radio International.

More News Headlines

David Lee dead at 64
His full name was David Lee Bunce, but he was known through the 1970s and ’80s as David Lee, hosting middays on WKRC-AM Cincinnati. After the station switched to Talk, Lee worked in retailing and also did some part-time work on local radio stations hosting Oldies shows. He died Sunday at age 64 and his funeral service was yesterday.

RBR Radar 2007
Radio News you won't read any where else. RBR--First, Accurate, and Independently Owned.

Clear Channel sues over disintegrating deal
Clear Channel has now sued in a Texas state court to try to hold American Securities Capital Partners (ASCP) to its 452.1 million bucks deal to buy 187 radio stations. ASCP has fired back with its own lawsuit filed in a New York state court, so look for lots of legal wrangling ahead.

RBR observation: With this deal now in doubt, the first and third largest deals of the Clear Channel’s divestiture of 488 smaller market stations are both on the fence. Mark and Randall Mays could have avoided all of this divestiture drama, of course, if they had accepted a preemptive bid from former Clear Channel Radio CEO Randy Michaels for the entire block of stations. You may have read elsewhere that he and Oak Hill Capital Partners offered around 800 million. We have it on good authority, though, that the actual bid was over 900 million, but that the Mayses held out for 1.1 billion. When all is said and done, will Clear Channel now even come close to that mark?
08/29/07 RBR #169


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