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FCC issues super fine for Super Bowl incident
As expected, and with a unanimous 5-0 commissioner vote, the Federal Communications Commission nailed 20 Viacom/CBS O&O television stations with proposed fines of 27.5K each, the maximum allowable under current guidelines, as punishment for the Janet Jackson/Justin Timberlake Super Bowl wardrobe malfunction, resulting in a 550K bottom line for Viacom. Viacom has stated its intention to fight the Notice of Apparent Liability.

RBR observation: Read further into today's issue. Particularly, read the comments of Jonathan Adelstein, who notes the "...puzzling precedent" of "...failing to hold all licensees responsible for the material broadcast over their station." If this NAL can't even pass the smell test on the 8th Floor of the FCC, how is it ever supposed to get through a court of law? | More... |

Commissioners unanimous
but not eye-to-eye
The Commissioners voted 5-0 to nail Viacom for the Super Bow incident, but in so doing did not see things as one. Four of them, all but Kathleen Abernathy, appended personal comments to the NAL. A big area of disagreement was the decision to fine the 20 Viacom O&Os while letting some 200 additional affiliates off the hook. Chairman Michael Powell said that the affiliates are responsible for what goes out over their airwaves, but could be exonerated in this instance since nobody anticipated the indecent turn the Super Bowl half time show took. Not so for Viacom, which "was not so passively involved." Powell said, "Unquestionably, Viacom consciously took the risk, and, thus, now bears responsibility. Both Michael Copps and Jonathan Adelstein thought all stations airing the material should have been indicted, and that the fine was worth ten seconds or less of commercial air time, hence not much of a fine, even if it is the biggest in television history. Copps and Kevin Martin noted that complaints sent to the FCC cited much more than just the wardrobe malfunction as examples of indecency, and that the ruling should not have been narrowly confined to that one incident. But why have us talk about it. Here are the statements of those commissioners issuing them. | More... |

Jackson speaks out
Janet Jackson recently discussed the wardrobe malfunction incident with GENRE Magazine, which describes its focus audience as gay men. Her remarks are to be published in the magazine's upcoming October issue, scheduled to hit newsstands 9/28/04. She charges George W. Bush with using the incident "...as a decoy to distract the nation from an increasingly unpopular war and sagging economy," as GENRE put it in a release. Jackson is also quoted directly. She said, "I truly feel in my heart that the president wanted to take the focus off himself at that time." Jackson said the fine levied against CBS/Viacom (which was still only in the works at the time of her interview) was hypocritical, given the sexual content of "television commercials for beer and Viagra."

RBR observation: Whether Mr. Bush welcomed a distraction or not, we do not think he or anyone on his staff lifted a finger to flood the FCC with complaints about the incident. Ms. Jackson's comments no more hold water than her Super Bowl garment was able to hold her breast.

Boyle cuts radio outlook
You had to see this coming with his warning about industry bellwether Emmis (9/2/04 RBR Daily Epaper #185). Wachovia Securities analyst Jim Boyle has now cut his Q3 and Q4 estimates for the entire radio sector. "The August monthly pacings came in flattish. Forward orders for September-October have fallen off more than we had expected," Boyle said in a note to clients. As a result, he's cut his Q3 estimate of radio revenue growth to 0% from his previous 2% and Q4 to 5% from his previous 8%. That drops his growth estimate for all of 2004 to 3% from his previous 4.2%.

RBR observation: Boyle is not a total pessimist. He thinks the industry is on the right track with efforts to reduce clutter, such as Clear Channel's "Less is More" campaign. But he says the rate cutting epidemic that began last spring is still continuing in some places. He's optimistic that the efforts to bolster rates by reducing inventory - - something he says is "rational and long overdue" - - should begin to bear fruit by Q2 of 2005. In the meantime, he says the niche formats and niche groups are the place for growth in radio - - both Urban and Hispanic - - and Radio One is his top recommendation.

Former AG and former AP boss to probe CBS
CBS has retained former US Attorney General Dick Thornburgh and retired Associated Press President and CEO Lou Boccardi to investigate mistakes in the preparation and broadcast of a "60 Minutes Wednesday" segment about President George W. Bush's service in the Texas Air National Guard. The report by Dan Rather focused on memos, including one which stated that Bush disobeyed a direct order, which CBS News now says it can't prove were authentic (9/21/04 TVBR Daily Epaper #184). Experts contacted by other news organizations have suggested that the memos were created on a modern computer, not a 1970s-era typewriter. When it retracted the story earlier this week, CBS said it would name an independent review to find out what went wrong and recommend what actions the network should take. It's now engaged Thornburg and Boccardi to conduct that review. "The two-person review panel will commence its work this week and will have full access and complete cooperation from CBS News and CBS, as well as all of the resources necessary to complete the task. The panel will report its findings to CBS News and CBS. The findings also will be made public," CBS said in its announcement.

RBR observation: Since CBS retracted the National Guard story on Monday, a lot of press attention has been focused on Mary Mapes, the veteran CBS News producer who researched the story for Rather. She had been a star at the network just a few months ago for breaking the Iraq prisoner abuse story, but she's now looking like the likely scapegoat for this fiasco. Not only did she obtain the disputed memos from former Guard officer Bill Burkett, but Burkett told USA Today that Mapes arranged for him to speak with Joe Lockhart, former Press Secretary to President Bill Clinton and now a key official of Sen. John Kerry's presidential campaign. Lockhart acknowledges that he did speak with Burkett by phone, but denies that anything was said about Bush's Guard service.

Viacom spin-off of Blockbuster stays on track
Viacom says a Delaware judge has denied a request to hold a hearing on whether to grant a temporary injunction against its share exchange spin-off of Blockbuster - - so the exchange offer can go on unimpeded. The order blocking the exchange offer had been sought by a Viacom shareholder who claimed that Viacom had provided more and better information about the Blockbuster spin-off to National Amusements, the company via which the family of CEO Sumner Redstone controls Viacom, than to other shareholders (9/21/04 RBR Daily Epaper #184). With the judge refusing to grant the injunction, the share exchange offer is still set to conclude on October 5th (9/9/04 RBR Daily Epaper #176).

Adbiz ©

1st half automotive ad spend up 11% in Spot TV
Total automotive ad spending (the combination of factory, dealer associations and individual dealers) increased 11.0% in Spot TV during the first half of 2004 compared to the first half of 2003, according to a TVB analysis of CMR data. The Big Three (GM, Ford, DaimlerChrysler) increased their collective Spot spend by 2.3%, from 1,165,389,000 to 1,192,729,000. "All Other" Spot spending, representing combined spending by 10 foreign automotive brands, increased 23.4% (from 809,061,000 to 998,216,000). The investment by the foreign automakers paid off. While "Big Three" unit sales declined by 0.5% during the period, "All Other" unit sales grew 7.1%. Total unit sales for the first half reached 8,267,470 vehicles, up 2.2%. The foreign automakers gained 1.7 market share points from the "Big Three." Chris Rohrs, TVB President, said: "It's clear that foreign automakers benefited by investing ad dollars in local broadcast TV. Spot spending was the isolated variable." Total ad spending for the automotive category (combining spending on 11 measured media, including outdoor, print, radio, and television) increased 5.2% for the first half of 2004. "Big Three" ad spending grew 5.1% and "All Other" spending went up 5.2%. Among all media segments measured by CMR, Spot TV represented the largest share of total automotive spending at 27.6%, newspaper was second at 27.4% and broadcast network TV was third at 20.3%. The "Big Three" spent 29.9% of their total ad dollars on newspaper and 26.4% on Spot TV. By contrast, the "All Other" group spent 29.2% of their total ad dollars on Spot TV and 24.2% on newspaper.

Advertising Week in New York City
The very First Advertising Week, invented by the 4A's, see's Red to the tune of around 300 thousand dollars according to a note put out last night by Crain's Ad Age. A loss for what was billed to be a historic and unprecedented week long celebration of advertising which started Monday as Ken Kaess, President and CEO of DDB Worldwide Communications and Chairman of Advertising Week in NYC rang the opening NASDAQ market bell but never heard the count of ten. Both the Radio Advertising Bureau and Television Bureau of Advertising planned their annual Fall Board meetings around this "historic" event and even sponsored key functions and last nights celebration dinner was cancelled before a menu was even put together. Advertising Week came up short due to what some say was very poor pre-planning. The general talk before the Advertising Week started that the 4A's out sourced the strategy and the plan just fell apart. One executive said Advertising Week was not developed as well as it should have because of to many chiefs and lots of good ideas that were not pulled together like they should have been. Another executive called this first Advertising Week a work in progress.

RBR observation: Work in progress is probably the best description. We still see this year's 4A's annual conference as one of the best and this should not detract any media executive not to attend their 2005 conference in New Orleans.

Media, Markets & Money tm

Washington Beat

Programming

KVI-AM Seattle brands
as Fox News station
KVI-AM Seattle and Fox News have partnered to provide the first Fox News branded radio station in the country. As you'll read, it's not an affiliation, but an INTEGRATION. Yesterday, KVI Talk Radio began featuring Fox News' top personalities and Fox News Radio news updates, in addition to its own line-up of local stars. The station's new moniker is "KVI Talk Radio 570...Fox News and talk radio."

Fox News' The Tony Snow Show will air 9:00 AM Noon PT. Fox News' Sean Hannity will continue to broadcast live from Noon-3:00 PM PT, with a daily encore at 6:00 PM. From 7:00-9:00 PM, KVI will air Fox News Live with Alan Colmes. Special Fox News updates will air on KVI at the bottom-of-the hour in the morning and afternoon supplementing the Fox News updates that air at the top-of-each hour daily. In addition, Fox News will also supply KVI with special breaking news reports during national and international breaking news events. | More... |

RBR observation: RBR Publisher Jim Carnegie recently did a One on One interview with Abernethy in September's RBR Solutions Magazine where Abernethy states, "Radio is focused. It has the regional ability to focus content with presentation and the ability to get scale." Want to read, learn, and find out more, Call April Olson at 703-719-9500 to subscribe and get this One on One intelligence issue.

Transactions

KOLW-FM Tri-Cities WA (Milton-Freewater OR) from Clear Channel Communications Inc. to ALC Communications.

KHTO-FM Tri-Cities WA (Basin City) from ALC Communications to Clear Channel Communications Inc.

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