Radio News ®

August revenue figures disappoint - - again
We all knew that August was going to be another disappointing month for radio revenues, but now we have the official numbers from the Radio Advertising Bureau (RAB). Total revenues were down 1%, with local flat and national spot off 5%. So, though the first eight months of 2004, radio ad revenues were up a measly 2%, with local up 3% and national down 2%. Just like the spinmeisters who went to work after last week's presidential debate, RAB President Gary Fries dug down to find a silver lining in this dark cloud. "In breaking down the various markets we are seeing some very encouraging results," Fries insisted. "For example, in markets 31 through 100, August showed a local increase of 8%. This is a leading indicator of a strengthening local marketplace that is starting to radiate into some of the larger markets."

RBR observation: Yes, September was, thankfully, a bit better than July and August, which will probably bring Q3 in flat with last year. But flat ain't growth folks! That silver lining in markets 31 through 100 means local is working hard. Don't know what categories and this is where forward pacing would help all in the business. Radio is local and not packed stacked and racked. Now all will wait for the string of conference calls to come with their bad news and Wall Street will pick at radios bones. We have said this before and will say it again, "Stop sucking up to Wall St. They are moving on anyway. Take your big time cash flow and go private. Radio is no longer capable of the growth they want anyway. We were better without them. A few are rich, most are not."

Funds find broadcasting to be a good hedge
Wall Street's hedge funds have discovered radio and TV lending as a way to make a good return in this sideways stock market. One broker tells us the hedge funds are moving into broadcasting in a big way, but another notes that it's rather expensive money.

RBR observation: Like so many things in life, it all depends on what your needs are. If you have lots of equity, qualify for bank rate financing and only need to borrow 5-6 times cash flow for an acquisition, you won't be looking at this option. But many young companies have to stretch another turn or two to make an acquisition possible - - so this is something else to investigate. | More... |

Satellite companies on a PR binge
Both satellite radio companies have launched new initiatives to gain public notice and expand in areas that have traditionally been strong points for local broadcasters - - local emergency information and personality programming. Following the recent rash of hurricanes in Florida, Sirius has donated more than a thousand receivers, boomboxes and subscriptions to local Red Cross chapters. "Residents in many parts of the South have been devastated by the hurricanes, and we feel it is important to help those without power stay in touch with the latest news and information when local news sources are not available," said Sirius CEO Joe Clayton. XM is kicking off two new nigh-profile shows by offering them free of charge for one week, beginning today, on its website. Obviously, the satellite broadcaster hopes that fans will want more and decide to sign up for the subscription satellite radio service. The two shows could not be more different. One is "The Bob Edwards Show," featuring the former anchor of NPR's "Morning Edition," whose new XM show will be a high-brow, news-intensive program featuring interviews with newsmakers, journalists and other notables. Decidedly low-brow is the other offering, "O&A Ungagged," featuring Opie & Anthony who were dropped by Infinity following their infamous broadcast of a public sex contest that had one couple copulating in St. Patrick's Cathedral.

RBR observation: Regarding the Sirius donation - - come on now, does anyone really believe that either satellite company's localized traffic/weather channel is going to be a primary source of LOCAL emergency information in a weather emergency? Although some individual radio stations were knocked off the air and many people didn't have access to TV with their electricity and cable out, we're not aware of any market in Florida that was ever without some of its radio stations on the air broadcasting truly local, vital information during the storms and their aftermath.

Study disputes FCC's cross-media weighting
The McGannon Communications Research Center at Fordham U. says that television/newspaper combinations should be disallowed by the FCC, even in the largest markets. In so doing, it takes to task the FCC's study used to justify local cross-ownership media caps. Many have commented on the lack of appropriate media weighting used by the FCC - - but the McGannon study put numbers to it. It says the FCC credited radio and the Internet with a weight of 37% when it comes to distribution of local news, a number it says should have been put at 9%. The FCC number was over four times too high. Daily newspapers were undervalued by a factor of 2.5. The FCC put them at 20%, while the McGannon report gave them a weight of 45%. McGannon also says weekly papers were undervalued, although not by that much - - the FCC put their weight at 9%, when it should have been 12%. Mark Cooper, a Fellow at McGannon and Director of Research for the Consumer Federation of America, says that the study supports the blockage of any attempts to merge a newspaper with a local television station. Specifically, he called for the FCC to refuse recent cross-ownership waiver requests by Tribune and News Corp.

Campaign ad watch: Eight Senate seats in play
Five US Senate seats currently under Democratic control and three held by Republicans are the focus of spirited campaigns, according to the Associated Press. This means that whatever funds are in the coffers of the candidates is likely to be augmented by out-of-state sources. Each party in each wing of Congress has a well-funded organization in place to provide help where needed. Here's the locations of still-competitive races.
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Reach Media taps Marty Raab
as SVP/Marketing
You read it here first: Nary a day after Premiere Radio Networks announced his replacement, Marty Raab has been named SVP/Marketing at Tom Joyner's Reach Media, effective today. His focus will be to develop and nurture new targeted marketing products for the brand beyond radio-TV/cable, Internet, event production, etc. There are other initiatives being readied as well. Raab will be responsible for developing new sales products to target multicultural communities, particularly the African-American community. Currently, Reach Media's product lines reach at least one in four African-Americans and the company seeks to in these figures moving forward. | More... |

Adbiz ©

Mars realigns global agency assignments
Mars, Inc. announced it is consolidating its global above-the-line advertising business with current partners BBDO and TBWA Worldwide effective 12/31. Grey Global Group will no longer serve in an above-the-line capacity, but will continue as an important agency partner to Mars across a range of below-the-line activities including interactive, direct, and sales promotion. The above-the-line business will be allocated among Mars' two current global partners - BBDO and TBWA Worldwide group - with the exception of a few local or regional specific business needs. With both agencies being part of the global Omnicom family, this move allows Mars to consolidate its advertising business within one single global advertising network. BBDO, in the Mars stable since 1995, is the primary agency for Cesar, Snickers, Sheba, M&Ms and Mars/Milky Way brands. TBWA became a partner in 2002, and currently handles Skittles, Pedigree, Whiskas and Uncle Ben's brands.

Grand Ole Opry taps Cracker Barrel
as presenting sponsor
The Grand Ole Opry will add a new name atop its legendary lineup when Cracker Barrel Old County Store becomes the first presenting sponsor in the 79-year history of the Opry. As the presenting sponsor, Cracker Barrel will become an integral part of the Opry's signature blend of music and entertainment, effective today. | More... |

Zimmerman Partners Advertising
bolsters executive team
Explosive growth that sets Zimmerman Partners Advertising on the path to double their size by 2006 has let the agency bring in national industry talent to add to their already impressive roster of personnel. Zimmerman Partners Advertising, Omnicom's retail specialist, has named Fred Zuckerman to Vice President of Media Services, Stuart Dornfield to Creative Director, Cliff Courtney to Chief Strategy Officer and Marc Rappin to Group Account Director. | More... |

ONDCP chooses FCB
Foot Cone & Belding NY has won the advertising and media buying portion of the White House's Office of Drug Control Policy's 130 million account after a review. The shop beat J. Walter Thompson for the biz and replaces current ONDCP agency Ogilvy & Mather.

Media, Markets & Money tm

Washington Beat

Engineered for Profit

CC Radio's Jeff Littlejohn comments
on AM audio bandwidth reduction
We spoke with CC Radio SVP Engineering Services Jeff Littlejohn about his move to reduce the bandwidth of the company's AM stations to match the bandwidth of available receivers to 5 kHz for AM talk stations and 6 kHz for AM music stations.

What is the timetable for the station changeover?
"This won't take long at all... I expect most stations to have completed this change within a week." | More... |

System integration next step
in digital surround sound
With several formats now on the table for HD Radio surround sound, the industry is turning to systems integrator Broadcast Electronics to integrate this new technology into the broadcast facility. During the NAB Radio Show, BE will play a systems integrator role in the surround sound demonstrations of the Fraunhofer format at the Telos Systems booth and another surround sound format showing for the first time in public at the Orban booth. Both exhibits will run 5.1 surround sound formatted by their respective technologies into a Broadcast Electronics FXi digital FM exciter and Broadcast Electronics FSi 10 HD Radio signal generator. Over the summer, BE also participated in testing of the Fraunhofer format in Germany. In September, at its Quincy sound lab, BE conducted system testing of SRS Labs' Circle Surround, a 6.1 surround sound format recently approved by iBiquity Digital for HD Radio compatibility. BE engineers are looking into equipment compatibility with the wide variety of surround sound technologies on the table, whether it be multiple stream or matrix audio techniques. "We are mainly interested in system compatibility at this point, so that when the industry does decide on a format, we're not locking them out of the choice they make," commented Richard Hinkle, BE's Director of RF Engineering. No systems integration issues have been detected for three of the four major contenders offering formats for HD Radio surround sound. The fourth contender, Neural Audio, is in partnership with Harris.

Monday Morning Shakers & Makers

Deals: 8/23/04-8/26/04
Styles Media's 120M acquisition of the two Spanish Broadcasting System co-channel FMs in Los Angeles propelled this week just about to the head of the class of 2004 - - and the good news is that it would have been a hot week even without the blockbuster. You'd have to go all the way back to the end of May to beat the 90M+ spent on the week's other 19 deals.

8/23/04-8/26/04 Total Total Deals 20 AMs 11 FMs 14 TVs 7 Value 211,211,411 | Complete Charts |	Radio Deal of the Week LA blockbuster is radio deal of the year | More... |
	TV Deal of the Week Smith reorg good for 26M | More... |

Transactions

WFFF-TV Burlington VT; WKTV-TV Utica NY; KIMO-TV Anchorge, KATN-TV Fairbanks, KJUD-TV Juneau, all AK; and KEYT-TV Santa Barbara from various licensees to Smith Media License Holdings LLC.

WCCY-AM, WOLV-FM, WHKB-FM Houghton MI. 100% of Tu-Mar Broadcasting Inc.

WION-AM Ionia MI from Agricultural Resource Group Inc. to Packer Radio WION LLC.

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