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Welcome to RBR's Daily Epaper
Volume 22, Issue 187, Jim Carnegie, Editor & Publisher
Friday Morning September 23rd, 2005

Radio News®

Viacom to stand pat after split,
look for cable cash

Neither of the two co-president/COOs at Viacom believe major acquisitions will be required when the multimedia giant splits in two. Les Moonves wouldn't mind adding CNN, or perhaps Univision, to his half. At least one analyst thinks it'll have success wringing cash out of CATV operators. The comments came at the annual Goldman Sachs Communicopia. GS thinks Viacom will be able to successfully get cable operators to " a nominal amount for the carriage of digital signals given the rising importance of HDTV service and the competition that cable companies are facing from DBS providers for HD customers." That competition may be stiffened yet again if telcos get into the MVPD business. GS thinks the networks may be able to play one MVPD against another to get compensation in the form of cash and/or advertising spots. The losers in such a situation may wind up being basic cable programmers, which may receive pressure to lower their own fees, and especially for marginal basic cable services, which may be dropped entirely.

RBR observation: Anybody who does not think the mass entertainment/information business is in for major upheaval just isn't paying attention. The rules are changing rapidly. More and more players are getting into the game. The number of media players is growing at a much faster pace than the growth rate of the population in general, meaning that the already strong trend toward audience fragmentation figures to speed up, not slow down. It's time to pay attention, be flexible and open minded, and be ready to act when the time is right.

It's official: FM auction delayed
FM Auction No. 62 has been rescheduled. Originally set for 11/1/05, it will now be held 1/12/06. Upfront payments are due by 12/2/05, and the status of applications will be made public about two weeks prior to that new deadline. 171 licenses are up for grabs. The FCC took the opportunity of making the announcement to warn potential participants of the prohibition on "communicating with each other about bids, bidding strategies, or settlements..." It also warns that care be taken when an authorized bidder is part of more than one bidding entity, or it one entity uses more than one authorized bidder. Collusion is a no-no.

Consumer groups wants cable
opened to competition

Consumers for Cable Choice say that current FCC regulation pertaining to the cable television industry contains "five fatal flaws," and it wants them corrected. Its president, Robert K. Johnson, said, "Current cable regulations are so seriously outdated and flawed that they handcuff consumers and keep them from relevant, beneficial video applications for their personal and business uses. The benefits of broadband go far beyond our current understanding of cable television. True broadband deployment will revolutionize the delivery of social services, education and medical consultations," Johnson said. "All that's needed to encourage this technology is an open market that will allow the American entrepreneurial spirit to take charge." The group basically charges that cable, without significant competition, offers the combination of rising cost - - 86% over the past ten years - - with relatively stagnant service, while regulatory hurdles stifle effective competition which, if allowed into the game, could well be able to provide increased access for minority and niche groups and increased innovation.
| CCC's list of CATV regulatory flaws |

Moody's has good news for Rupert
Moody's Investors Service has placed the debt ratings of News Corporation on review. While that's often a worrisome thing for a company to hear, in this case it's good news. Moody's is looking at Rupert Murdoch's company with an eye toward upgrading its ratings. "The review is prompted by the strengthening of the company's balance sheet and credit metrics over recent years, together with Moody's confidence in management's desire to obtain and maintain stronger credit ratings," said the ratings agency. Moody's did not provide a timeframe for completing the review.

NAB Radio Show, Philadelphia
How about a whole lot less?
"I think a lot less is a lot better," stated NRG Media CEO Mary Quass in the NAB Radio Show group head super session, but she doesn't think Clear Channel's Less is More (LIM) initiative goes far enough. She suggested that the radio industry should have the guts to cut inventories 50% and raise rates. "We're all a bunch of wimps. We don't want to raise our rates," Quass complained. The group heads were in agreement that LIM is going to be good for all of radio. "Clear Channel should be applauded for doing something different," said Infinity CEO Joel Hollander, even though he doesn't agree with the one size fits all approach. He said Infinity has cut inventory on about a third of its stations, but doesn't think it makes sense for all. "We're not advocating that what we're doing is right for everybody. We're not really sure it's right for all of our radio stations," said Clear Channel Radio CEO John Hogan. But he said that he likes what LIM has produced so far. Although the 5% cut in revenues is tough to take in the short term, Hogan applauded CC Radio's sales force for keeping the figure that low in the face of a 20% cut in spot loads. "We need our industry leader to lift those rates," said ICBC COO Charles Warfield as he applauded the LIM effort and said it had made all other broadcasters take a hard look at their own stations. What about PPM? Hogan denied that CC Radio issuing a request for proposals for an electronic radio ratings system was any negotiating ploy against Arbitron, since his company had already renewed its ratings contract before issuing the RFP. "We need to look at every option out there. There is too much at stake," he said. So, is radio willing to wait for a new ratings system, while Arbitron is pushing to start rolling out PPM in 2006? Hollander said Infinity is definitely willing to wait, rather than adopt one system and then have to replace it in a few years. "I laud John [Hogan] for saying wait a minute," agreed Christian.

Group heads tee up HD Radio
There was no announcement yet of an industry consortium to program HD Radio multicast channels, but Infinity CEO Joel Hollander told NAB Radio Show attendees to expect some important announcements in the next 60-90 days. "We've agreed we don't want it to be the wild west," he said of the talks going on among major group heads to plan the HD Radio rollout. "The industry has one chance to introduce this," said Clear Channel Radio CEO John Hogan. He said there are some disagreements on how to proceed, but he said it is important that the industry is talking. As for a time frame, Hollander said it will likely be three to five, or six years before HD can have any material impact on the radio business. But we got an indication of why he's committed to the effort when an audience member asked the group heads what gives them sleepless nights. "I want to make our product relevant to younger kids," said Hollander, noting that his own children are telling him that listening to radio in college dorms today is pretty much zero. HD could be a way for radio to win back young listeners from iPods, Internet downloads and such.

Just what does localism mean?
That proved to be one of the most interesting questions that Bonneville CEO Bruce Reese, Chairman of the NAB Joint Board, asked yesterday of the two FCC Commissioners who made the trip to the NAB Radio Show. "It's the key to success for terrestrial radio with the competition that's coming off of satellite," said Commissioner Jonathan Adelstein. "That means being responsive to what's happening in the local community, reflecting the needs and concerns of the local citizenry. If it's a music station, at least having some opportunity for local artists to be heard on the air. Autonomy for stations to be responsive in the local community," he explained. Abernathy said the national satellite services "are not about localism at all," while terrestrial stations have to go after the local community as their life blood. "Most broadcasters, I believe, get that," she said. In her view, the FCC has to be careful in making any new rules that they aren't too much of a burden on those good broadcasters who are involved locally. "You have to be able to turn a profit or you will go dark," she said. Abernathy got the morning's biggest laugh when asked why cable and satellite services aren't subject to the same indecency rules as broadcasters. "Well, we like them better," she quipped. But then she got serious and said "the law is just different." Indeed, Adelstein said he understood why broadcasters want a level playing field. But in light of past court decisions against content restrictions on subscription services, he said the FCC was unlikely to take action on its own and that it would be an uphill battle for the FCC to win in court even if the Congress passes a law giving it the power to regulate cable and satellite indecency. The courts are likewise a problem for the FCC's ownership rules, now tossed back to the Commission by the Third Circuit Court of Appeals in Philadelphia. Adelstein said the FCC is moving as fast as it can, but has to do the research this time so its rules will hold up in court. Abernathy was less optimistic, noting that the next ownership challenge could end up in a new circuit after conflicting rulings already in two circuits.

RBR observation: Adelstein's comments about requiring stations to put local artists on the air are particularly disturbing. Are we heading toward something like the Canadian content rules of our neighbor to the north? Would the Commissioner want local content rules? This is scary stuff.

Praise for broadcasters from the FCC
"They rose to the occasion," said Kathleen Abernathy as she and fellow FCC Commissioner Jonathan Adelstein praised radio stations for serving as a vital lifeline after Hurricane Katrina. And, they said at the NAB Radio Show in Philadelphia, the FCC learned some lessons about its own role in dealing with emergencies. For one thing, they noted that some broadcast and telecom company employees were blocked by police from entering storm ravaged areas to restore communications services. "These are first responders," said Adelstein, so the FCC will be working to make sure that other agencies cooperate in getting stations back on the air and getting fuel in to keep their generators operating. That could be put into play in just a few days if Hurricane Rita delivers a second punch to some of the Gulf Coast.

Eddie says good-bye
Laughingly calling himself a lame duck, Eddie Fritts told the NAB Radio Show it's been an honor to represent broadcasters for 23 years. Recalling his own career owning local radio stations in Mississippi before taking the NAB post, Fritts said that while much has changed over those many years, what has remain constant is that the most successful stations are those deeply rooted in their local communities. "That hasn't changed, even in a world of iPods, satellite radio, BlackBerries and cell phones. There is simply no substitute for the immediacy of local radio. Localism is our franchise and ours alone," Fritts said. To drive home the point, he paused to play a report broadcast by NBC News showing how radio had remained the only communications link for people in Biloxi, MS after Hurricane Katrina struck. Fritts praised the broadcasters who stayed on the air and continued to serve their communities, even though some had lost their own homes. He also applauded the thousands of broadcasters nationwide who participated in NAB's BroadcastUnity Day to raise funds for hurricane relief efforts - - with the goal of 100 million already surpassed and closing in on 200 million. And after his speech there was a photo op to present American Red Cross Executive VP Alan McCurry with a symbolic giant check for one million being donated directly by NAB. But before that, Eddie got to say his goodbye. "Thank you for all your kindness to Martha Dale and the Fritts family over these many years. Now, let's have a great Radio Show!" That brought the entire room to its feet to give a standing ovation to the retiring NAB President.


Net Radio Sales repping Infinity stations' online inventory
Yesterday we reported Clear Channel Radio's Online Music & Radio unit named Ronning Lipset Radio as its exclusive, national third-party rep firm for its online properties. Well, apparently Infinity has been signed with Net Radio Sales for its sites' representation for a while now. From the Net Radio Sales website's client list, without issuing a press release, the list of Infinity sites includes:
| The Stations |

Ad spend grows faster
than economy-by category, advertisers

According to data recently released by TNS Media Intelligence, total advertising expenditures for the first half of 2005 increased 4.5%, compared to the same period in 2004, to 70.5 billion. All of the top 10 advertising categories, representing 50.1% of all advertising expenditures, exhibited growth for the period with the exception of Non-Domestic Automotive. Direct Response posted the largest increase.
| View the Charts |

Media Markets & MoneyTM
A tender message from your friends at Entravision
Per its "Offer to Purchase and Consent Solicitation Statement" dated August 9, 2005, Entravision extended a tender offer for "...any and all of its 225,000,000 aggregate principal amount of 8.125% Senior Subordinated Notes due 2009." That offer expired earlier this week. But wait - - it's still not too late. The offer has been extended until 9/29/05. The tender offer yield for Notes tendered and accepted remains at 4.189%.

Washington Beat
Martin calls for
first responder upgrade

It should come as no surprise that the calls for improved public safety communications during times of emergency are loud and many as the 2005 hurricane season explores new alphabetical territory. FCC Chairman Kevin Martin said as much before the Senate Commerce Committee yesterday. "First responders need an interoperable, mobile wireless communications system that can be rapidly deployed anywhere in the country," he testified, becoming one more voice effectively calling for deploying DTV and returning analog TV spectrum to the government ASAP. Ranking member Daniel Inouye (D-HI) has kind words for the FCC and Martin. He said, "Chairman Martin demonstrated strong leadership by swiftly marshalling the Federal Communication Commission's (FCC) resources and working with the affected communications industries. The FCC's timely attention to the crisis, waiving rules and granting necessary authorities, helped to bring critical networks back on-line. Additionally, the proposals announced last week to dedicate the FCC resources to emergency preparedness functions are right on target. I have long supported Commissioner Copps' call for the creation of a Bureau that focuses specifically on emergency preparedness and elevates this work among the FCC's priorities. These actions will do just that."

HD Radio for PDs
At the NAB Radio Show yesterday, Bob Struble, iBiquity Digital CEO, gave a solo presentation on the latest progress on the HD Radio front, along with what the future holds for HD radio revenue-generating options, how multicast formats can compete with satellite and ways stations can promote HD in their markets. Speaking to the PDs, Struble noted the now-heavy competition from online, iPods and satellite: "There are now all kinds of mobile information and entertainment that are really out there trying to drag your listeners the future every car is going to have an MP3 player with 10,000 tracks in the trunk. XM and Sirius are going to have a more local feel. Future generations of their receivers are going to be able to show where you are located and automatically air local information without you having to search it out-all within the scope of the FCC licenses. So your job is changing, and changing dramatically."
| Read More... |

1.3M KIOD-FM/KSWN-FM McCook NE from Austin-McCook LLC (Jay D. Austin, Eileen Austin) to Legacy Communications LLC (Joseph Jay Varicek). 65K escrow, 935K cash at closing, 300K non-compete. Existing duopoly. [File date 8/18/05.]

460K KOJY-FM Bloomfield IA from Horizon Broadcasting Inc. (Doug Smileye) to Bloomfield Broadcasting Company Inc. (Mark McVey, Karen McVey). Promissory note. Duopoly with KNEM-FM Memphis MO. [File date 8/17/05.]

30K KBMP-FM Enterprise KS and KARF-FM Independence KS from American Family Association (Donald E. Wildmon) to Community Broadcasting Inc. (Richard P. Bott, Sherley E. Bott, Charles M. Watkins). Cash. Stations are noncommercial. Seller will help procure CP modifications to move stations. [File date 8/18/05.]

Stock Talk
Finally, an up day
Wall Street ended its three-day retreat as traders apparently figured the market had finally figured in all of the damage Hurricane Rita is likely to do to drive up oil prices. The Dow Industrials crept back up 44 points, or 0.4%, to 10.422. Broadcast stocks were mixed.

Radio Stocks

Here's how stocks fared on Thursday

Company Symbol Close Change Company Symbol Close Change













Journal Comm.




Citadel CDL
12.97 -0.18

Radio One, Cl. A




Clear Channel




Radio One, Cl. D




Cox Radio












Saga Commun.








Salem Comm.








Sirius Sat. Radio








Spanish Bcg.
















Viacom, Cl. A








Viacom, Cl. B








Westwood One








XM Sat. Radio




International Bcg.










Send Us Your OpinionsWe want to
hear from you.

This is your column, so send your comments to [email protected]

This reader thinks that NAB needs a history lesson

It is apparent that no one at NAB has taken a moment to look at what history has already proven. Long before consolidation in the industry, NAB tried to "merge" or "co-locate" the Fall Radio show several times including the ill fated World Media Expo in Los Angles in the 1990's. I don't recall the year but that show was a dud and NAB advised all of the exhibitors that the following year the "NEW Radio Show" would debut in New Orleans. Since that time the Radio Show has been lackluster at best. What apparently the Radio Board has yet to admit to themselves or NAB refuses to admit to itself is that the consolidation it wanted and received in the industry has caused a marked decline in the number of attendees for Radio at both the Fall Show and the Spring show. What NAB need to try and the Radio Board should let it, is to fold the Fall Radio Show into the Spring NAB show. This has the potential of doubling Radio attendees and it will give vendors the largest possible audience of international and domestic customers to view their products. I believe they are afraid to try this, even once, for fear it will be an overwhelming success and the separate Fall Radio Show will be retired once and for all, as it rightfully should. NAB and the Radio Board need to stop splintering the now limited Radio attendees between two shows. The synergy for Radio that this move could potentially create would greatly benefit the industry and NAB as a whole VS struggling with a lame fall Radio Show year after year which forces attendees to choose between the spring show and the fall show benefiting neither show nor the industry as a whole. Its been over 10 years of trying to make the Fall Radio Show a success. It doesn't take a rocket scientist to see the Fall Radio Show is a dog that just won't hunt.

Ernie Belanger

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'Today's Perspective'
Technology waits for no one - Blackberry 2006


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Media House 2005
Peter Davidson buying as others sit on the sides. Close-up One on One

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RBR Radar 2005
Radio News you won't read any where else. RBR--First, Accurate, and Independently Owned.

No perfect storm to sink radio values
Despite sluggish revenue growth that's depressed stock valuations on Wall Street they're still strong private market demand for good radio properties. so no repeat of the "perfect storm" of the early 1990s when a revenue decline hit at the same time as a credit crunch. Rather, there was a new face on the lending on the front line Ivan Zinn of HBK Investments, the first representative of radio's newest money source, hedge funds as he said hedge funds are looking for new opportunities due to a lack of opportunities in their traditional investments. "Hedge funds are willing to make the bet on the value of FCC! spectrum," Traditional lenders on the panel said they were not concerned so much about Wall Street beating down radio stocks, but rather on a borrower's ability to repay the loan, so they still like radio buyers with good management teams.
RBR observation: Lots of talk or double talk but the one key liner was what RBR has stated for years - lenders like buyers that can repay the loan backed up with solid management teams. Get it - solid management teams - which does not mean keeping your head in the sand. But getting on the front line and doing the job at the front not from an ivory tower. Gee - brilliant what common thinking accomplishes.
09/22/05 RBR #186

Radio groups advised
to innovate, go private
"We are great at developing content," said FigMedia1's Bill Figenshu who said at NAB "We suck at marketing ourselves." He sees promise in HD Radio, but says the industry has about two years to get its act together and speak with one voice to make consumers want HD receivers - - "Otherwise, this is going to smell like AM stereo." "The web is our entre to the future," was the view of Jon Coleman of Coleman, who criticized radio stations for putting lots of self-promotional material on their websites, rather than finding out what users would really like to have - - what would make them come to the site regularly. "If radio becomes a website medium and an in-car medium, then it's got a shot." RBR observation: Took the words out of our mouth. Fresh to hear someone say in public at an NAB convention that "We (radio industy) suck at marketing ourselves." Now if we can get the CEO's from cutting GM's research and marketing budgets it would be a good fight. Radio would have a chance. Remember the competition is shooting with play with and shooting real bullets.
09/22/05 RBR #186

Bounce Back -Frank Boyle On the NAB successor to Eddie Fritts
Never one to mix words had a few on the NAB successor to Eddie Fritts. When you're right -you're right. How about frequent editorial on same?? Or better yet - do interview - with pix - with Eddie Fritts and Bruce Reese--ask all the tough questions..?? Where are the gutsy--hard drinking--hard playing pioneers who got us here--with damn little money but a plethora of balls and dreams? They'll tell you that NAB loses money on Fall Radio NAB. My rebuttal on that is--please get out of the way--let the NAFMB & NRBA Rifle Assn take it back and do pure balls out radio. We don't need the NAB infrastructure to run up unnecessary expenses.
09/22/05 RBR #186

ABCRN Producer
ABC Radio Networks needs a motivated, creative, talk radio producer for a nationally syndicated daily talk show targeted to women. Must have a love for news and current events, possess superb writing skills, a terrific sense of humor, and work well under pressure. No Calls. EOE
See Radio Careers

GSM Nations Capital
Washington DC Business Talk station has an immediate GSM opening. Must have proven experience in large to major market sales. Full benefits added incentives and extraordinary growth potential. AE positions also available.
See Radio Careers

Account Executive
Radio People of Jackson, MS (WUSJ, WYOY, WJKK and WIIN) are interested in talking to any displaced sales executives from the Gulf Coast area. Nancy Fletcher 601-956-0102 EOE
See Radio Careers

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