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Volume 23, Issue 179, Jim Carnegie, Editor & Publisher

Thursday Morning September 14th, 2006

Radio News ®

Susquehanna held to
payment of move-in bonus
When Susquehanna Radio bought an Anniston, AL FM station back in 1996 for about 15M, its contract with seller Bridge Capital Investors included a clause calling for a substantial additional payment if the station was successful in gaining regulatory approval for a move into Atlanta. It's there, and the 11th Circuit Appeals Court in Atlanta has ordered that Bridge receive payment plus interest totalling 15M. The station is now WWWQ-FM, a CHR which went from Susquehanna in its 1.2B group sale to Cumulus filed with the FCC 11/21/05. Attorneys from Blasingame, Burch, Garrard & Ashley represented Bridge Capital in a rehearing of a breach of contract suit against the national law firm retained by Susquehanna which upheld an earlier ruling in favor of Bridge. The defendants have been ordered to pay 10M in damages and an additional 5M+ in interest. Attorney Henry G. Garrard III commented, "My partners and I quickly saw what was at the real center of this case - Susquehanna had gotten what they wanted - a radio station to move from the small market of Anniston AL to Atlanta, the tenth largest in the country. Even though they were now enjoying radically increased revenues, they did not want to pay my clients what they owed them. What's right is right under the terms of the contract - Federal Judge Story agreed with us, and so did the judges who upheld the verdict on appeal."

Analyst urges Clear Channel
to sell more stations
Marci Ryvicker at Wachovia says Clear Channel has been doing a lot of things right lately, reorganizing management and making deals that expand beyond traditional radio. And while the company has sold off a few stations, she says Clear Channel would improve its ratings and margins if it sold off more non-core radio assets. Ryvicker noted that the recent sales of 22 stations in six markets worked out to roughly 13 times EBITDA - above both the 10.2 times value that the market has on CCU's stock and the 11.7 times valuation for the radio sector. "We think CCU would improve its ratings and margins if it were to sell non-core assets, likely those stations in markets ranked No. 101+, especially as 73% of CCU's radio revenue stems from the top 100 markets. In addition, smaller markets tend to have greater overhead and therefore lower margins," she told investors. However, Ryvicker warned against any fire sale that might cut values. Rather, she wants to see a "steady paring off of stations and markets that are slow-growers and low contributors to cash flow." As for the other things that the analyst likes, she cited a couple of examples of moves "which confirm the company's commitment to finding new ways of generating growth." One was the multi-year deal by CCU's Total Traffic Network to provide traffic data to navigation systems in BMW cars and the other a national launch of mobile radio programming to Cingular Wireless phones.

RBR observation: We hear there is a list being circulated, though tightly controlled, of a few hundred stations in smaller markets that Clear Channel might be interested in selling. Not that all are going to be sold, but CCU is willing to deal if potential buyers are willing to pay a decent price. We expect to see a slow but steady stream of sales over many months to come.

Televisa bid? Don't count on it
Bear Stearns analyst Victor Miller is telling clients it is not very likely that Televisa will come up with a topper bid for Univision before next week's vote on the Saban buyout. He also thinks a new bid would have to be around 39 bucks a share, not just 38, to succeed. Despite reports that Televisa CEO Emilio Azcarraga Jean is still trying to assemble a topper bid (9/13/06 RBR #178), Miller sees lots of reasons why it is unlikely to materialize. "We believe Televisa has still not replaced Carlyle, Blackstone, KKR and Venevision, who all defected from Televisa in the original bidding; could Cascade and Bain make up the difference?" Miller asked. In his view, to top the Saban bid on the table of 36.25 per share, Televisa would have to come up with a bid in the range of 38.75-39.25. That includes 88 cents a share for the 300 million breakup fee, 50 cents for the delay of having to start the FCC process all over and a 1.25-1.50 premium to make it enticing for Univision shareholders to wait for their payout instead of taking Saban's cash now. Miller notes that Univision CFO Andrew Hobson recently cashed out 100K of options which were due to expire before the September 27th shareholder vote and may have sold some more stock as well - indicating that Univision management isn't expecting a higher bid. Concluding that a Televisa bid is unlikely and that the current stock price nearly reflects the full buyout, Miller has lowered his rating on Univision's stock from Outperform to Peer Perform.

RBR observation: What will Emilio Azcarraga Jean do? As we noted previously, if he couldn't put together a winning bid when the auction was open, it is all the more difficult to do so now and cover the cost of derailing the Saban deal. Miller suggests that the current talk about a last-minute topper bid may be a negotiating tactic. But what is not clear is just what the Mexican billionaire might be willing to take at this point if he can't win control of Univision. Talks about selling Televisa's Univision shares to the Saban group before the vote broke up without a deal. Azcarraga has repeatedly said he wants no part of joining the Saban consortium. So, if this is a negotiating ploy, just what is he trying to negotiate? We wait to see if anything pops before the vote next Wednesday.

Senate goes for new improved EAS
Broadcasters are a big step closer to gaining assistance with the burden of alerting the public to an emergency situation, following Senate passage of a bill establishing a new, more inclusive version of EAS called WARN (Warning, Alert, and Response Network). Radio and television will be joined by a wide range of communications technologies to get the word out. A big feature of the WARN system will be the inclusion of wireless devices in an alert, which have the potential of reaching some 200M Americans who use them and may not be near a broadcast receiver at a critical moment. The language came from the Commerce Committee, whose chairman, Ted Stevens (R-AK) said, "With hurricane season upon us, we are reminded of how critical the WARN system is to help ensure that we are prepared for busy storm seasons. Considering the National Hurricane Center's continued predictions, we cannot afford to wait any longer. The United States could be hit with major hurricanes again this year, and the House must act swiftly to implement this important warning system." Stevens is also seeking 1B in funding for the development and implementation of interoperable communications systems for first responders.

State watchdogs eyeballing vision ads
The attorney general of Iowa, as well as health officials in other states, have problems with ads from Vision Improvement Technologies for their See Clearly Method. They question the effectiveness of SCM's program, which advocates a series of exercises for near-and far-sightedness, rather than the more typical prescriptions of glasses, contacts or Lasik surgery. For starters, there is no clinical proof that the system works. The two vision problems result from improper lens curvature, not problems with the muscles around the eyes. They note that many of the users give testimonials in the ads have subsequently given up on the technique and gone to other remedies, but are still in the ads. They further note the use of selective testimonials. For example, one follow-up study found six favorable comments, but they were heavily overmatched by 49 complaints during the same period, according to the Washington Post. So far the ads have gotten past a review group because they were presented mostly as opinion rather than fact, but there have been problematical exceptions.

RBR observation: This sounds like a job for the FTC or the DHHS. Broadcasters cannot be expected to have the expertise to determine when a medical item crosses the line into quackery. You'd think, however, that something this important would have long since come to the attention of appropriate authorities. We've certainly heard ads for this service in the Washington area. It will be interesting to see if they can prove their claim or if they'll be chased from the air.

Ad Business Report TM

American Airlines launches NYC, Chicago "flights"
American Airlines has launched a new campaign that focuses on its global schedule and service offerings are just what meets New York and Chicago's travelers' discerning needs. The campaign focuses on the extensive international and domestic flight schedule that American and its partner, American Eagle, offer from New York's JFK, LaGuardia and Newark airports, together with White Plains/Westchester and Newburgh/Stewart. For Chicago, O'hare Airport is emphasized. Chicago gets radio as part of the effort, NYC doesn't, as you'll read. "Our theme for this campaign is 'we know life can take you virtually anywhere and that's exactly where we fly.' It resonates with many of our frequent flyers and is easily understood by those passengers who may only travel once or twice a year," said Rob Britton, American's Managing Director - - Brand Development and Advertising. "This new campaign will feature some distinctive elements, including the use of the large wall spaces of buildings, large ads on buses and the AA message shown on screens in office-building elevators."
| The campaign includes |

NAB Day Time Planner

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

BROKERS
Todd Fowler/David Reeder/Gene Ferry/Bruce Pollock, American Media Services, Hilton Anatole, 843-972-2200, [email protected], [email protected], [email protected], [email protected]

Jack Higgins/Dan Graves/
Joel Day/Denis LeClair, CobbCorp, LLC., Hilton Anatole, office 202-478-3737, [email protected]

Andrew P. McClure, The Exline Company, Hilton Anatole, Suite 353 office 415-479-3484, cell 415-497-3855, [email protected]

Frank Boyle, Frank Boyle & Co., Sheraton Suites Market Center, 203-969-2020, [email protected]

Cliff Gardiner, Clifton Gardiner & Co., Hilton Anatole, 303-758-6900, [email protected]

Gordon Rice, Gordon Rice Associates,
843-884-3590, Hilton Anatole, [email protected]

Ed Henson, Henson Media, Inc., Louisville, KY, 502-589-0060, Hilton Anatole, [email protected]

John L. Pierce,
John Pierce & Company LLC,
859-647-0101, cell 859-512-3015, Hilton Anatole, [email protected]

Jamie Rasnick,
John Pierce & Company LLC,
859-647-0101, cell 513-252-1186, Hilton Anatole, [email protected]

Dick Kozacko/George Kimble,
Kozacko Media Services, office 607-733-7138, cell 607-738-1219, Hilton Anatole,
[email protected]

Larry Patrick/Greg Guy/Susan Patrick/Summer Foust,
Patrick Communications, Hilton Anatole
Suite #1034, 410-740-0250, [email protected]

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

Terry A. Greenwood,
TAG Media Consulting,
Hilton Anatole, office 410-931-3362, [email protected]

LAWYERS
Gregg P. Skall,
Womble Carlyle Sandridge & Rice, PLLC 202-857-4441, Hilton Anatole, [email protected]

TRAFFIC SOFTWARE
Eric Mathewson, Founder and CEO; Wide Orbit; 415-675-6751; Booth 617 and Hilton Anatole Presidential Suite;
[email protected]

Media Markets & Money TM

Fleet inserts Patrick at CT group
A trio of AM stations are being put under the receivership of broker, consultant and group owner Larry Patrick by order of the U.S. District Court in Bridgeport in that state. The stations have been licensed to Freedom Communications of Connecticut, owned by Stephen and Richard Weaver-Bey. The stations, all in the Hartford-Ndew Britain-Middletown CT market, include WLAT-AM, New Britain; WNEZ-AM, Windsor; and WKND-AM, Manchester. The action was brought by Development Ventures, L.L.C. against Brisker as defendant. In a release announcing the move, it was noted that the stations are solvent and that the action is not related in any way to a bankruptcy proceeding.

Washington Media Business Report TM

An interesting comment
Sen. Ted Stevens (R-AK) was around for the beginning of the FCC Chairman Kevin Martin hearing Tuesday 9/12/06, but was called to the floor on pressing business, forcing him to turn the Martin session over to colleague Conrad Burns (R-MT). Before he left though, he did ask a question of Martin. Stevens mentioned that phone service in his state of Alaska is provided by numerous local carriers who have labored mightily for years to make sure the citizens of that remote state are connected to the rest of the nation. What happens, he wondered, when wireless suppliers, particularly big corporate wireless suppliers with an enormous national footprint, come in to compete with the wireline incumbents? Martin replied that it seemed to him that the FCC's mission was to foster competition and avoid as best it can the imposition of roadblocks to new and improved technologies. Stevens said he feared that the local providers would be utterly unable to compete with a big wireless company.

RBR observation: We thought this a curious statement. Isn't this like when a mom & pop radio station that has faithfully served its small market community for years and years suddenly finds itself competing with a multi-station cluster owned by a company based in Atlanta, Las Vegas, Denver, New York or perhaps even San Antonio? Should small entities be protected from expanding national entities? Or should the free market determine who owns what? Without picking sides, we note that we always thought Stevens was basically a free market guy, then this. Interesting...

Internet Media Business Report TM

ING Direct launches viral campaign
ING Direct, the nation's largest direct bank, launched its first ever viral marketing campaign focused on reaching renters/potential first time home buyers. The campaign outlines the virtues of home ownership and promotes ING Direct 's Orange Mortgage,. The backbone of the campaign is the new MoveOutMoveUp.com website, a dynamic Internet experience targeting first time homebuyers, which features content, video clips, and games depicting the humorous and often frustrating side of renting. An added bonus within the website and one sure to encourage sharing of the resource among friends, is a hidden secret mortgage offer that effectively reduces the closing costs on the Orange Mortgage to zero - saving first time buyers significant dollars against the cost of a mortgage. The website features original short films and video games that look at the stark realities that American's face as renters. To encourage sharing the message among its customers, ING has seeded its short films on viral video sites like youtube.com and established links from leading online gaming sites to ING's video games.

CBS to stream prime-time shows on Google
CBS already sells downloads of episodes on iTunes Music Store and Google's video store. In May, it launched its ad-supported online channel "innertube" to stream programming created just for the Web. Now, premiere episodes of three new and returning CBS prime-time series are streaming on Google Video at http://video.google.com/cbs.html for free. The episodes include the pilot episodes of Smith and The Class, and the premiere episode from this season's sophomore series The New Adventures of Old Christine. The shows will be available free to viewers until 9/17.

Financial Roundtable

Looking at the 2006 broadcast finance marketplace
There's an increased number of lenders looking to write loans to radio and TV station owners and buyers. The downturn in Wall Street stock values for broadcasters isn't deterring that enthusiasm from the financing side. Here's a conversation from a panel of experienced broadcast lenders assembled by RBR/TVBR: Dave Meier of Wells Fargo Foothill, Steve Healey of CapitalSource Finance LLC and Robert Malone of GE Commercial Finance, Global Media & Communications. They were questioned by RBR/TVBR's Jack Messmer and Mark Fratrik of BIA Financial Network.
| Read More... |

Transactions

185K KVCI-AM Canton TX from Canton Broadcasters Inc. (Eric L. Jontra) to RDH Land & Cattle Company Inc. (Richard Don Harris). 18.5K escrow, balance in cash at closing. LMA 9/1/06. [File date 9/6/06.]

N/A WGL-AM/WXKE-FM, WCKZ-FM, WNHT-FM & WWGL-FM Fort Wayne IN (Fort Wayne, Roanoke, Churubusco, Huntington IN). 95% of Summit City License Sub LLC from Northwest Capital Partners II LP (John Jacobs) to D.B. Zwirn Special Opportunities Fund LP (Daniel B. Zwirn). Seller is turning over licenses to lender while continuing to operate stations. Existing superduopoly. Summit has filed to sell WXTW-FM Auburn IN to a third party. [File date 9/6/06.]

Stock Talk

Another up day
Investor confidence from the recent decline in oil prices boosted stocks on Wednesday. The Dow Industrials rose another 45 points, or 0.4%, to 11,543.

Radio stocks also enjoyed gains. The Radio Index rose 0.297, or 0.2%, to 143.037. Cumulus led the pack, up 3.8%. Salem rose 2.8%.

Radio Stocks

**Here's how stocks fared on Wednesday**
Company	Symbol	Close		Change	Company	Symbol	Close		Change
Arbitron	ARB		38.33	+0.78	Hearst-Argyle	HTV		23.71	+0.29
Beasley	BBGI		7.14	-0.07	Journal Comm.	JRN		11.56	+0.26
CBS CI. B	CBS		28.77	-0.58	Lincoln Natl.	LNC		61.51	-0.35
CBS CI. A	CBSa		28.83	-0.51	Radio One, Cl. A	ROIA		6.31	-0.09
Citadel	CDL		9.21	-0.10	Radio One, Cl. D	ROIAK		6.41	-0.02
Clear Channel	CCU		29.63	-0.17	Regent	RGCI		4.00	+0.03
Cox Radio	CXR		16.15	+0.33	Saga Commun.	SGA		7.87	-0.21
Cumulus	CMLS		10.59	+0.39	Salem Comm.	SALM		11.85	+0.32
Disney	DIS		30.45	+0.24	Sirius Sat. Radio	SIRI		4.03	-0.02
Emmis	EMMS		12.28	+0.15	Spanish Bcg.	SBSA		4.30	-0.07
Entercom	ETM		25.37	+0.24	Univision	UVN		35.05	-0.35
Entravision	EVC		7.63	-0.09	Westwood One	WON		7.19	-0.05
Fisher	FSCI		42.73	-0.63	XM Sat. Radio	XMSR		12.51	+0.11
Gaylord	GET		45.03	-0.32	-	-	-	-	-

Bounceback

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Below the Fold

Ad Business Report
American Airlines
Launches NYC, Chicago "flights" campaign focuses on its global schedule...

Media Markets & Money
Fleet inserts Patrick at CT group
A trio of AM stations are being put under the receivership...

Washington Media Business Report
An interesting comment
Sen. Ted Stevens tossed a snowball at Commissioner Martin...

Financial Roundtable
Looking at the 2006
Broadcast finance marketplace...

Stations for Sale

AUCTION: Small market AM/FM in the mid-west.
Cash flow 200K. FM CP for 100KW which will provide city grade into rapidly growing top 200 market. For more information, photos and auction detail e-mail Jim Lakoduk, agent,
[email protected].
Pifer's Auction and Realty.

WANTED! FM CP's
(commercial or noncommercial)
John W. Saunders, Media Broker
713.789.4222
[email protected]

Nevada C1: Asking 900K
Possible Terms. Market Favorite
Good Sales-Motivated-Make Offer
Brett Miller - MCH Enterprises, Inc.
805.237.0952
www.mchentinc.com

Radio Media Moves

Upped in the Twin Cities
Shelly Malecha Wilkes has been named General Sales Manager of ABC Radio's KXXR-FM "93X" Minneapolis-St. Paul. She was previously an AE for co-owned KQRS-FM and the "Drive 105" triple-cast.

Promotion at His Net
Contemporary Christian His Radio Network has added Operations Director stripes to PD Rob Dempsey's duties. Rob has served as Network Program Director since March 2000. As Network Operations/Program Director Rob will continue to co-host mornings with Rob and Kristin.

Zimmerman upped
PromoSuite announced the promotion of Craig Zimmerman to the newly created position of Vice President / General Manager. Zimmerman was upped from Vice President of Operations, a position he has held for three years.

More News Headlines

Demps exits
Clear Channel
In the Clear Channel Radio reorganization last month, Bruce Demps was to have been one of the former Sr. VPs kept on, but as a Regional VP running a local market while overseeing a few others (8/28/06 RBR #167). RBR sources now confirm that rather than fire the Market Manager he had put in place in Memphis, Tim Davies, Demps quit CC Radio. Demps had been one of the highest ranking African-Americans at Clear Channel.

Financial restructuring at Air America?
Blogs were alive with rumors on Wednesday after ThinkProgress.org posted a story that Air America Radio was set to declare bankruptcy in a major restructuring. "Air America could remain on the air under the deal, but significant personnel changes are already in the works. Sources say five Air America employees were laid off yesterday and were told there would be no severance without capital infusion or bankruptcy," the item read. Air America recently ended its relationship with host Jerry Springer and tapped Sirius' "The Young Turks" for mornings. Rumor has it Chairman Rob Glaser is out as well. RBR was not able to get confirmation of any of the claims from Air America CEO Jon Sinton, who referred us to spokesperson Jaime Horn, who had not responded by deadline.

RBR Radar 2006

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

Forecasting growth for radio
The annual Communications Industry Forecast by Veronis Suhler Stevenson (VSS) sees total spending on radio growing by 5.3% in 2006 to 22.01 billion bucks. But there is a hitch - that includes not only traditional radio, but also satellite radio and online radio. The latter two, though still small, are growing rapidly, while VSS sees much slower growth for traditional radio, which saw growth of only 0.3% last year while satellite radio jumped 156.9%. For all of radio - traditional, satellite and online - VSS is projecting average annual growth of 5.4% from 2005 through 2010 to a total of 27.19 billion "as growth in satellite and online radio will augment slower growth in broadcast radio."

RBR observation: All forecasters think they have this crystal ball when some truly do not have a clue except crunching a number. Crunch away but the real distribution of ad dollars will vary within the next 6 to 12 months with using technology as the key tool. Few companies are out there but only the company that understands the radio business will be the winner. And as for satellite radio lets get real and satellite radio is not yet a solid business. Satellite is a competitor but the real competitor is any hand held device that the consumer controls which includes iPods.
09/13/06 RBR #178

Nielsen may enter
radio ratings competition
A few months after saying no-thanks to a Portable People Meter (PPM) joint venture with Arbitron, Nielsen Media Research confirms that it has been approached by the Next-Generation Electronics Ratings Evaluation Team about making a late entry in the radio ratings RFP competition. Nielsen Chief Information Officer Jack Loftus told RBR/TVBR that his company was approached by the Next-Gen group, not the other way around, so Nielsen is still assessing whether or not it is interesting in the radio competition, which would pit it against the existing entries of PPM from Arbitron and the Smart Cell Phone-based system from The Media Audit/Ipsos.
09/12/06 RBR #177

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 on all three positions
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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