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Volume 22, Issue 175, Jim Carnegie, Editor & Publisher

Wednesday Morning September 7th, 2005

Radio News®

Why Radio One consolidated
its rep contracts at Katz
The news broke here in an alert early yesterday morning - - Radio One has consolidated its national representation at Katz Radio Group, leaving Interep out in the cold. It wasn't too hard to see this coming. Radio One CEO Alfred Liggins told Wall Street analysts that the company's strategy of splitting its business between the two big rep firms wasn't working out as he had hoped (2/18/05 RBR #35). Then, in the next quarterly conference call, COO Mary Catherine Sneed indicated that Katz was outperforming Interep in delivering national business to Radio One stations (5/6/05 RBR #90). After months of debate within Radio One, the decision was announced yesterday - - all 69 Radio One stations in 22 markets would be repped by Katz. "We wanted to be in one camp so we could be more effective in selling our group," Sneed told RBR. We got a bit more elaboration from CFO Scott Royster, pictured on the left with CEO Alfred Liggins. "We spent a fair amount of time over the past year looking at relative performance and ultimately we felt that Katz's relative performance was stronger than Interep's - - it's as simple as that," he said. For Interep, this is the latest in a string of high-profile client losses - - Citadel, Cumulus and now Radio One. "I think another way to look at is that we've also been extending our agreements with a lot of our clients," said Interep President and COO George Pine. "As far as Radio One goes, I'm proud of our performance for them because it stands on its own. January through July, their markets were down 2.2% and in our markets for them we were up 3.6% - - that's a 5.8% swing." While Radio One represented just under 4% of Interep's commission revenue, Pine said 70% of that was in three of 11 markets - - Atlanta, Baltimore and Washington - - where he says Interep should be able to replace that billing with other clients.

RBR observation: The loss of Radio One is also a blow to Interep's reputation as the top rep firm for stations targeting African-Americans, dating back to its acquisition of HNWH, the rep firm which pioneered national representation of black stations. "We are committed as ever to continuing to service the important Urban community," Pine insisted. But no other Urban group comes close to Radio One in size, so this loss has to hurt. The problem now for Interep is dispelling the public perception that its clients are jumping ship. It was just a few months ago that Al Liggins was saying that it was important to keep Interep as a competitor to Clear Channel-owned Katz - - and that Interep clients should be discussing how to keep the independent rep viable. Now, though, he's made the decision to take his business elsewhere.

Wall Street analyst lowers
broadcast estimates for 2005
Harris Nesbitt analyst Lee Westerfield has cut his forecast of US ad spending for this year, including reductions in his expectations for radio and television - - both network and local. "Automotive and retail continue to slip, rather drive growth for broadcasters,' Westerfield told RBR/TVBR. In fact, weakness in broadcast advertising is the reason for the analyst lowering his overall ad spending forecast to a gain of 4.4% this year, down from his previous 5.4%. He notes that Internet advertising is expected to grow 32% in 2005, but with still only less than 4% of the total ad pie, that online strength isn't enough to counter the drag from TV and radio. But he says that new media growth is coming at the expense of broadcasters and other old media. "Said plainly, Internet growth continues to drain off half of the normal cyclical recovery for traditional media," Westerfield said in his analysis. In his view, radio today is best viewed as two separate entities: Clear Channel Radio, where he expects revenues to be down 6% this year as the company stands firm on its Less is More initiative; and the rest of radio, which he expects to be up 2%. But CC Radio is so big that it drags down the average dramatically. After figuring in the 2% drop for July reported Friday by RAB, Westerfield now expects 2005 to be up only 0.3% - - a drop from his previous estimate of 1.5%. In television, Westerfield's big concern is the automotive advertising sector, which remains soft. He's lowered his expectations for both the network business and station operators. His forecast is now for network revenues to be flat overall for 2005 and that spot TV will be down 5% overall, with local up 1% and national down 12% (down 3% excluding political). He'd previously looked for network to be up 4% and spot down 1%. The good news there, he notes, is that "approximately 950 million of political dollars will arrive in next year's midterm election year with their usual resuscitative effect."

Westerfield: Inventory down; rates up

In his monthly report on radio advertising trends, Harris Nesbitt analyst Lee Westerfield reports that the trends are holding which should be good news, at least in the long term, for radio. Spot loads in the top 10 markets were down 8.1% in August, compared to a year ago, based on data from Radio Airtime Monitor. Clear Channel led with a drop of 26.5%, with other groups cutting inventory less dramatically - - Entercom down 4.4% and ABC 4.2%. "Yield per minute continues to increase," Westerfield said. He calculates that pricing increased approximately 6% during the month, helped by premium-priced 30-second spots.

Commissioners vow to continue Katrina relief
The four sitting FCC commissioners issued a joint statement thanking members of the communications industry for tireless effort to get their respective piece of communications infrastructure back into working order. More importantly, they vowed to do whatever is necessary on their end to expedite the restoration. The FCC was quick to grant regulatory relief to the stricken area last week, from quickly turning around requests for STAs and extending CP completion deadline, to allowing AM stations to broadcast at higher daytime levels at night and noncommercial stations to carry advertising when passing along vital information from a commercial source.
| Read the commissioners' joint statement in its entirety |

Did ABC gyp an Egyptian?
Photographer/videographer Essam Mohamed Aly Deraz is suing ABC News for repeated use of footage of Osama bin Laden back in the 80s. The film, which shows bin Laden in battle against Soviet forces in Afghanistan, was used by ABC back in 1998. Deraz said he was paid 15K, and the usage was supposed to be limited. He claims that ABC has continued to use it without permission, and worse, has passed it along to CNN and the BBC without giving Deraz either credit or payment. The suit is being filed in Denver.

Media Business Report

TV phones by next fall?
It is only a matter of time before the next generation of cell phones - - one that is capable of showing television programming - - is upon us. And it might not be all that far away. How about Fall 2006? That's the target date for commercial applications of a system being developed by Qualcomm. The biggest hurdle, according to Reuters, is developing the spectrum infrastructure, which will have to be a separate one-way path from the two-way path used by the phone part of the phone - - and it will also have to manufacture phones capable of using the service. The second part will be finding distributors. Qualcomm reportedly will try to license the service to existing cell providers as an add-on service. Finally, it will have to have programming. Qualcomm is said to be well into negotiations with providers such as MTV, CNN, ESPN and Comedy Central.

MBR observation: Phone TV figures to be most used away from home. We reported on a pilot program in Finland that found a primary user group among mass transit commuters. Favored programming was short-form fare, news and sports. We just hope the tens of thousands of our closest friends who share I-95 with us will not have their "phone" on while they're trying to drive. They already have enough trouble talking and driving. In other words, we all know Hollywood loves massive car crashes - - let's hope Hollywood does not suddenly become the leading cause of them. All beltway jokes aside we once again remind all of the Class of 2009 and the tool or toys they were raised with - cell phones, laptops, video remotes, cable known as just TV. Ask the Class of 2009 "What are Rabbit Ears?" The answer is - 'Whatever.' So lets pour a little more lighter fluid on the flame - How are you going to measure this audience TV/Cable? The diary as it will be emailed in? The world is moving and the diary is stilling on the corner of the kitchen sink or mail box with the rest of the junk mail.

Adbiz©

US advertising grows 4.5% in first half
Total US ad spend for the first half of 2005 increased 4.5%, compared to the same period in 2004, to 70.5 billion, according to TNS Media Intelligence. The 4.5% first half growth follows a first quarter increase of 4.4%, indicating that the advertising market is maintaining spending. "The first half ad expenditure numbers demonstrate sustained momentum from the first quarter of the year," said Steven Fredericks, TNS CEO. "The 4.5% growth rate for the period is slightly higher than our forecast of 4.1% issued earlier this year. The advertising market continues to outperform the general economy but the third quarter will be a much more difficult comparison period because of last year's stimulus from the Summer Olympics and national elections."
| View Media Dollar Chart |

MEC taps Bruce Jay Cohen
Mediagedge:cia has named media vet Bruce Jay Cohen as managing partner, director of national broadcast. He will oversee all buying duties for Campbell's, Toys "R" Us and Mattel accounts. Before joining MEC, Cohen was a consultant to Masterfoods, where he managed the company's brand budgets, the relationship with their media buying agencies, and their branded entertainment assignments. Cohen had previously spent 20 years at MediaVest.

Volkswagen chooses
Crispin Porter + Bogusky
Volkswagen has named Crispin Porter + Bogusky Miami to handle creative in the US and Canada, after a review. Arnold here had previously handled the account. VW spent 345 million on advertising last year.

Media Markets & MoneyTM

Swap shop: KNIT one, WORL two?
Salem Communications is coming one step closer to complete set of top 50 markets, while James Crystal Broadcasting adds another market in its own right. Salem moves into Orlando, while Jim Hilliard's James Crystal gets a foothold in Dallas, in a swap valued by broker John Pierce at over 6M dollars. In Orlando, Salem will get WORL-AM, at 660 kHz out of Altemonte Springs. Crystal gets KNIT-AM, which itself just recently entered the Salem portfolio - - it was part of the multi-market swap with Univision last year.

Close encounter in Tallahassee
Opus Media is now the proud owner of an FM foursome in the Florida capital, according to the brokers at Media Venture Partners. MVP represented seller Triad Broadcasting. The 12.5M transaction puts WAIB-FM, WUTL-FM, WEGT-FM & WHTF-FM into the Opus portfolio.

Entravision in major refi
Entravision Communications announced that it is in the midst of refinancing its debt. It anticipates replacing its current 400 million facility with one for 650 million, consiting of a 7.5 year term loan for 500 million and a 6.5 year revolver for 150 million. The Spanish radio and TV specialist will use the new facility to refinance its bank debt, its 225 million in outstanding 8.125% notes and for other corporate purposes.

Washington Beat

NAB keeps pouring on the multicast heat
The National Association of Broadcasters is locked in a pitched battle with the cable industry over rules of the road for the upcoming digital television revolution. So far, it's been using print displays in Capitol Hill news publications to drum up support for a legislative multicast must-carry mandate. Now its using a surgically-precise video flight aimed at the tiny demographic with a say in the matter - - the 535 senators and representatives on Capitol Hill, and their staffs. A good, old-fashioned TV commercial on the subject went to email boxes all over Capitol Hill, extolling the virtues of multicast - - if legislators make it possible. The commercial shows a citizen watching a wall consisting of six video screens showing six types of local programming which will be possible in a multicast environment. As a voiceover discusses cable's attempt to thwart multicast, the screens start to go blank - - hey, why are we trying to write a description when you can just see it for yourself.
|

View the Video |

FCC melts portion of Snow Hill fine
Snow Hill Broadcasting's (SNB) WQMR-FM, operating on the outskirts of the Salisbury-Ocean City market in Snow Hill MD, was hit with a 10K fine for failure to maintain a complete public inspection file. Unlike many similar instances leading to a fine, the station did have a file. However, it was missing several components, including a political file, its "The Public and Broadcasting" manual, and a public correspondence file. SNB followed the footsteps of countless broadcasters in asking for a reduction because the error was not willful, and remedial steps were taken. As the FCC has pointed out countless times, willful failure does not mean station management said something like, "We're just not going to do that political file thing." It means that station management did not willfully do the opposite - - assure that the file is in fact in place as it should be. And remedial action is something to be expected, not rewarded. Pleas of inability to pay were also determined to be groundless, based on submitted documentation. However, SNB was given credit for at least having a partial file, and taking that and similar past situations into account, the FCC knocked the fine down to 4K.

Programming

Larry King joins WW1's NFL coverage Monday nights
Westwood One announced Larry King will join the Westwood One NFL Monday Night Football pre-game show, along side Jim Gray, for the entire 2005-2006 NFL season. "We have spared no expense in delivering the absolute best NFL Monday Night Football broadcast imaginable, assembling a truly all-star broadcast team, which includes Boomer Esiason and Marv Albert calling the game, John Dockery as sideline reporter, Jim Gray for pre/post and half-time, and now Larry King as a contributor," said Peter Kosann, Westwood One Co-COO. "This is great news for our advertisers, affiliates and the NFL fans."

News Analysis

RBR observation - Close-Up First
Clear Channel preparing HD Radio multicast Consortium

See the attached PDF, the PowerPoint presentation does a good job of laying out the pros and cons of each possibility. While it may seem arrogant to some to propose that Clear Channel and Infinity manage a national partnership, don't forget that the two already supply lots of programming to everyone else in radio, and even to each other, via Westwood One and Premiere Radio Networks. But would an industry-wide coalition pass muster with the DOJ's antitrust watchdogs? That question is raised in the document, but, at this point, not answered. It's clear that most radio companies don't have the resources to fund, launch and market dozens of new programming services for channels which will, for the first few years, be available only to a minority of the listening public. Talks have

been taking place for months among various groups to figure out how to move radio into a multi-channel digital world. We applaud all of the creative thinking being devoted to this. If everyone works together, radio can and should get this right. If nothing else, terrestrial radio can learn from the expert PR efforts that the satellite radio guys have orchestrated over the past few years. While their audiences remain miniscule, they've created the public impression, however false, that XM and Sirius have become major players overnight and taken significant market share away from terrestrial radio. Broadcasters have to work together in each market to build "buzz" for HD radio and promote their HD2 channels. Make people believe that HD receivers are the latest, hot thing and you should be able to build market demand that will make HD quickly surpass the level of satellite radio receiver penetration. After all, unlike satellite PAY radio, HD is going to be advertiser-supported and free to the consumer. That's an easy choice for people to make. Space is open in RBR for any and all to participate with your BounceBack to [email protected] including Hogan and Hollander.

Transactions

1.8M WTTX-FM Appomattox VA from CLL Inc. (Terry Cook) to Positive Alternative Radio Inc. (Vernon H. Baker, Virginia L. Baker, Edward A. Baker). 200K down payment, 300K cash at closing, 1.3M note. Buyer will change station license for noncommercial operation. [File date 7/29/05.]

350K KFLB-AM Lubbock TX from Drew Ballard to Walker Broadcasting & Communications Ltd. (David Walker, Fred Underwood). 35K earnest money, balance in cash at closing. Includes non-compete. [File date 7/27/05.]

35K WADM-AM Decatur IN from Wells County Radio Corp. (Joe Shanley) to Holden Broadcasting Inc. (Rick HOlden, Ryan Devoe). 20K earnest money, balance in cash at closing. [File date 7/28/05.]

Stock Talk

Stocks jump as oil spigot is opened
Wall Street cheered as the major industrialized nations said they would release 60 million barrels from their oil stockpiles because of the damage to the US oil industry by Hurricane Katrina. The Dow Industrials shot up 142 points, or 1.4%, to 10,589.

Radio stocks also got a boost. The Radio Index gained 1.695, or 0.8%, to 208.235. Arbitron led the way, up 2.8%. Entravision rose 2.5% as it announced a loan refinancing.

Radio Stocks

**Here's how stocks fared on Tuesday**
Company	Symbol	Close		Change	Company	Symbol	Close		Change
Arbitron	ARB		42.70	+1.18	Jeff-Pilot	JP		50.19	+0.36
Beasley	BBGI		14.83	+0.13	Journal Comm.	JRN		15.99	+0.01
Citadel	CDL		13.17	+0.02	Radio One, Cl. A	ROIA		13.72	+0.05
Clear Channel	CCU		32.48	-0.27	Radio One, Cl. D	ROIAK		13.75	+0.11
Cox Radio	CXR		15.41	+0.18	Regent	RGCI		5.50	-0.16
Cumulus	CMLS		12.65	+0.13	Saga Commun.	SGA		14.50	+0.27
Disney	DIS		25.17	+0.41	Salem Comm.	SALM		19.14	+0.19
Emmis	EMMS		23.77	+0.30	Sirius Sat. Radio	SIRI		6.92	+0.05
Entercom	ETM		32.62	+0.18	Spanish Bcg.	SBSA		7.74	+0.08
Entravision	EVC		8.08	+0.20	Univision	UVN		26.62	+0.05
Fisher	FSCI		48.94	+0.34	Viacom, Cl. A	VIA		34.40	+0.41
Gaylord	GET		46.88	+0.44	Viacom, Cl. B	VIAb		34.40	+0.53
Hearst-Argyle	HTV		25.97	+0.24	Westwood One	WON		20.53	+0.24
Interep	IREP		0.60	-0.01	XM Sat. Radio	XMSR		35.14	+0.66
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]

On how to market HD Radio
(8/25/05 RBR #167).

Regarding what to call HD multi-cast channels; in your observation you suggest that the radio industry should think long and hard about how to approach this. I agree whole heartedly, however, this is a marketing issue and not a broadcasting issue.
| More... |

Russ Oasis

Radio Media Moves

ABCRN's Harve Alan joins Mercury Radio Research
Mercury Radio Research, the San Diego-based perceptual and marketing company run by Mark Ramsey, announced ABC Radio Networks Director of Programming Harve Alan has joined on as Executive Vice President. Previous to ABCRN, Alan had served as SVP/Programming for CC Radio/MidAtlantic.

More News Headlines

Limbaugh heads to Broadway

Collegiate Broadcasters
relocate convention

Hurricane relief efforts abound

Broadcasters' Foundation
aiding storm victims

Bob Denver dead at 70

NAB Daytime Planner

The following brokers will be attending the NAB. Call or email to make your appointment in advance.

American Media Services,
Todd Fowler, David Reeder,
843-972-2200, Marriott,
[email protected], [email protected]

Clifton Gardiner & Company,
Cliff Gardiner, 303-758-6900,
Ritz-Carlton Hotel,
[email protected]

Force Communications, Hal Gore, John Laurer, Stan Raymond,
770-329-2234, Hilton Garden Inn, [email protected]

Frank Boyle & Co., Frank Boyle,
203-969-2020, Marriott Courtyard, [email protected]

Gordon Rice Associates,
Gordon Rice, 843-884-3590,
Marriott Downtown, [email protected]

Henson Media, Inc. Ed Henson,
502-589-0060, Loews Hotel, [email protected]

John Pierce & Company LLC,
John Pierce, Cell 859-512-3015,
Jamie Rasnick, Cell 513-252-1186,
859-647-0101 Hilton Garden Inn,

Kozacko Media Services,
Dick Kozacko, Cell 607-738-1219,
George Kimble, 607-733-7138,
Marriott, [email protected]

MCH Enterprises, Inc.,
Brett Miller, Cell 805-680-2265,
805-237-0952, Marriott Courtyard,
[email protected]

Patrick Communications,
Larry Patrick, Greg Guy,
410-740-0250, Marriott, [email protected], [email protected]

Schutz & Company,
Bill Schutz, Cell 757-880-9251,
757-258-8740, Loews Hotel, [email protected]

Serafin Bros., Glenn Serafin,
cell 813-494-6875, 813-885-6060, Marriott Downtown, [email protected]

RBR Radar 2005

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

How much is that Mousy
in the Window?
Walt Disney is still looking to sell off its radio assets but, according to a Reuters report, has slowed the process since its initial asking price of 3B or more failed to cause any potential buyers to reach for their checkbooks. A powerful threesome is said to be in on the negotiations, including Emmis Communications, which is flush from the recent sale of about half of its television portfolio. The other two are Citadel and Entercom. The emergence of ABC as a possible seller is said to have slowed down the previously announced sell-off by Susquehanna - - which is being shopped pretty much to the same group of customers (with the possible addition of Cumulus Media). Speculation is that the ABC stutter step may have moved Susquehanna back to the front of the line. RBR observation: Look at the buzz Disney has caused as first Susquehanna is expecting bids to close within the next two weeks for their radio and cable operations. Citadel is said to be pursing Susquehanna's radio in which they may have their fingers crossed that Susquehanna will see a nice bid for the cable spin off separately and leave radio to their potential rumored offer. But as RBR mentioned as the talk of Disney consistently shopping ABC Radio just seems to slow all progress forward and ABC has some real plums of facilities and many want to spend their borrowing cash smartly. And do not count out Susquehanna managements' bid for the combined cable and radio as they are backed said to be backed by real money players like Kohlberg Kravis Roberts & Co. who we believe once back Herb McCord's radio operation. Do not count out last second largest radio group in number and that would be Cumulus Media which is also said they too may lob a bid in to the total mix. Our only issue is if Disney is going to sell this time - do it and move forward as your employees need to know and plan their lives.
09/06/05 RBR #174

Radio hits a July pothole
June radio results, as reported by the Radio Advertising Bureau, were flat. That was the expectation for July as well, but it turns out predictions for a flat month was overly optimistic. A modest 3% gain in non-spot revenue was not enough to radio out of the hole dug by a 2% decline in local business and a 3% drop in national. YTD, local, national and total revenue are all up 1% over the January-July stretch of 2004, unaffected by flat results in non-spot.
RBR observation: We haven't heard any speculation, but it seems that there is a very good chance that September revenue statistics are going to be reported out of the red ink well - - it would take strong positive gains elsewhere to make up for the revenue crater left in the wake of Katrina in the Louisiana, Mississippi and Alabama.
09/06/05 RBR #174

John Maher Fires back at Jon Mandel Director of Planning U.S.
International Media John Maher took exception to Jon Mandel's bounce back and stated "I had to read Jon Mandel's response twice before I realized it wasn't a joke. What an incredibly namby-pamby, sniveling, mealy-mouthed reply. Besides foisting an answer that's woefully out of place, the oft-quoted U.S. Chairman of the world's 8th largest "media agency" seems to have been out sick or behind a door for the last 20+ years...As long as the industry continues with a Three Stooges approach to resolving this, we'll have Nielsen and their lousy methodology as a monopoly." 09/02/05 RBR #173

Jon Mandel
Chairman MediaCom U.S.
Fires back to WGN-TV's Dominic Mancuso, Mr. Mancuso that the reason Nielsen is a "monopoly" (which it really isn't as there are other research companies) is that stations, in a bid to save money, stopped buying both Arbitron and Nielsen ratings. The problem is not the rating company, it is the programming. 09/01/05 RBR #172

Hey Talk Radio
Sales Managers
Remember last week this was on the QT? It is now out and it is Clear Channel's KTLK-FM Minneapolis-St. Paul needing GSM with a proven track record of success to take a new Talk station to record heights. If you are a direct "Animal" with the savvy to manage transactional business then we want to hear from you.
See Radio Careers

Market Manager
Montgomery, Alabama with our new Hallelujah 104 and our 3 Urban stations dominating the market and need this key person to be community involved and provide leadership to a hungry sales staff. See our qualifications and if you have them you are encouraged to joint our Clear Channel team in Montgomery. In confidence contact us.
See Radio Careers

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