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Volume 24, Issue 195, Jim Carnegie, Editor & Publisher
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Friday Morning October 5th, 2007
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Radio News ®
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 Emmis tees up today
The bar has been set pretty low by Wall Street as Emmis reports this morning on its fiscal Q2 (June-August) results. Analysts expect revenues to be down. The Thomson/First Call consensus is that revenues will be down 4% to 96 million, with estimates ranging from 94 to 98 million, versus 100 million a year ago. At Bank of American, analyst Jonathan Jacoby says his checks with markets across the country indicate continued weakness in radio, with no sign of a pickup in the current quarter. "We are projecting Emmis' domestic radio revenues to decline 9% pro forma to 63.6 million. Emmis' three largest markets were down approximately 4% in the June-August timeframe, and we believe the company continues to underperform its markets," Jacoby told clients. While he expects domestic radio revenues to be down 9% when Emmis reports today, he is looking for international radio to be up 15% to 10.7 million, producing a total radio decline of 6.2% to 74.2 million. Add in a 2% gain in publishing revenues to 21.2 million and Jacoby expects total revenues at Emmis to be down 4.5% to 95.4 million and EBITDA down 25.6% to 18.8 million.
RBR observation: Despite having to deal with an angry major shareholder, Martin Capital, which is pressing for a break-up or for CEO Jeff Smulyan to take the company private, the immediate challenge is for Smulyan and Radio Division President Rick Cummings to fix problems at several of the company's largest stations and get Emmis back on track. At the same time, they have to deal with the impact of PPM as Arbitron rolls it out in Emmis' largest markets. What's in the future? We go back to Jacoby: "Break-up, get bigger in large markets, buyback stock, status quo? Which way will Jeff Smulyan go? Although we estimate Emmis' breakup value at 20-25, Mr. Smulyan's control of the company makes it unlikely for current investors to realize most of the spread between the current share price and our break-up valuation."
Rehr wants hearing on record company/artist relations
In the battle over performance royalties for airplay, the music industry trotted out musicians to carry the water. But will the musicians end up with the cash? The NAB thinks Congress should try to find out before it crafts any legislation. NAB President/CEO David Rehr fired off a letter to Subcommittee on Courts, the Internet and Intellectual Property Chair Howard Berman (D-CA) and Ranking Member Howard Coble (R-NC) requesting a hearing. "A hearing that includes the Recording Industry Association of America and the four major record labels would allow members of the Subcommittee to explore more thoroughly the typical business practices of the recording industry and the dynamics of the relationships between the performers and the record labels," wrote Rehr. "If the goal is to improve the circumstances of performers and build the cadre of music into the future, the relationship between performers and record labels also bears examination." Points in need of exploration include the specifics of label/performer contracts; historical details of label vs. performer share of income from recording sales; minimum, average and maximum dollar amounts per CD sale received by labels and performers; artist retirement benefits; percentages of rights ownership among labels and performers; percentage of performers who find themselves in debt to labels; and whether labels seek a cut of money generated from live performances.
RBR observation: This addresses the big question about the latest airplay royalty grad, which many believe is simply part of an all-points thrust to make up for money lost as the recording industry adjusts to new internet realities. Will cash taken from broadcasters benefit artists or multinational conglomerates?
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XM and Sirius set shareholder votes
XM Satellite Radio has set November 13th for a shareholder vote on approving the pending merger with Sirius - and Sirius shareholders will vote the same day on authorizing enough new shares to make that possible. Of course, those votes mean nothing unless both the FCC and Antitrust Division of the Department of Justice (DOJ) agree to allow the only two satellite radio companies to become one. XM and Sirius had said last month that they believed they had complied with the DOJ's 2nd request for information, but that apparently hasn't satisfied the antitrust investigators. "They continue to ask for information," Karmazin was quoted as telling the New York Post this week. XM shareholders will be voting on whether to merge with Sirius and exchange each share of XM for 4.6 shares of Sirius stock. Strictly speaking, Sirius shareholders will be voting on whether to acquire XM in the stock swap. They will, however, vote on whether to authorize the creation of more than 1.7 billion new shares which will be needed for the stock swap. Sirius is already one of the very few US corporations with more than a billion shares outstanding. After the merger it will have more than three billion shares.
 NAB, watchdog renew attack
on XM/Sirius
Academic/attorney J. Gregory Sidak, on behalf of the Consumer Coalition for Competition in Satellite Radio (C3SR), says that there has been no substantiation to the claim that XM and Sirius are in anything but a competitive marketplace built for two, and should not be allowed to reduce to one. NAB noted that "they recognize that following the Commission's legal standards would kill the merger, so they try to kill the standards instead." Slidak claims that much of the merger proponents argument rests on the assumption that new technologies will emerge to compete with satellite radio. "The fact that entrepreneurs may be designing new audio devices in their garages does not inform the ultimate question of whether, over the next two years, SDARS customers would substitute away from SDARS to another audio device in response to a relative change in prices," he said.
Slidak provocatively accused Sirius of price fixing, since it promised a la carte offerings if, but only if, the merger is approved, which Slidak "...calls a breathtaking admission of critical antitrust significance." He explained, "It is an agreement not to compete over the pricing and unbundling of currently bundled content. Rarely do price-fixing cases contain such conclusive evidence of a meeting of the minds between two competitors to refrain from competing with one another." NAB said that the two satellite services "make no attempt to demonstrate compliance with the DOJ/FTC guidelines and instead urge the Commission to ignore them." It argued that "acquiescence to such an approach would be arbitrary and capricious, inconsistent with [FCC] precedent, and set the Commission's merger review process on a risky course."
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Senate: Another Republican seat opens up
Pete Domenici (R-NM) has announced his retirement, citing health reasons. The move deprives the Republican party of a fifth incumbent in 2008, a year in which it is already defending 22 of 34 seats up for grabs. Others who are leaving include Wayne Allard (R-CO), John Warner (R-VA), Larry Craig (R-ID) and Chuck Hagel (R-NE). The battle to take Domenici's seat is expected to be highly competitive, as are those in Colorado and Nebraska, while prospects of a party change in Idaho is more of a longshot. Rep. Heather Wilson (R-NM) has already indicated plans to run for Domenici's seat. However, she along with Domenici were involved in one of the hotter fired US Attorney cases, that of David Iglesias, which may be an exploitable issue for whoever the Democrats nominate to run for the seat. The state's governor, Bill Richardson (D) could be a possibility, although the Washington Post reports he has no interest in the seat at this time. Other Republicans facing serious challenges in 2008 include John Sununu (R-NH), Susan Collins (R-ME), Norm Coleman (R-MN) and Gordon Smith (R-OR). The most vulnerable Democrats are Mary Landrieu (D-LA) and Tim Johnson (D-SD).
RBR observation: Even if 2008 somehow turns out to be a good year to run as a Republican, Domenici's exit would embolden a Democratic challenge and probably force national Republican committees to divert precious cash to New Mexico. The need to do that will rise exponentially if the Democrats manage to field a viable candidate, and it will in turn weaken party efforts in other locations. Incidentally, Democrat who will go into the history books as the very last to face off against Domenici is well known to broadcasters. It was former FCC Commissioner and anti-indecency champion Gloria Tristani. Domenici brushed her aside in 2002 with a commanding 65% of the vote.
 TRN responds to Savage attackers
Talk Radio Network's Michael Savage was condemned this week by the San Francisco Board of Supervisors for exercising his freedom of speech in a manner the Board improperly "deemed" to be "symbolic of hatred and racism". During his syndicated show, Savage dismissively criticized the attention then being given to reports of illegal alien students fasting in support of educational benefits for illegal aliens by quipping: "I would say, let them starve to death, then that solves the problem." Said TRN in a statement: "The Board's condemnation of Savage's exercise of his free speech right to comment critically on protest fasts supporting illegal immigration was disturbingly combined with a 'Whereas' clause immediately before the 'Resolved' clauses noting that 'community organizations and immigrant rights groups' were planning action in front of the San Francisco station broadcasting The Michael Savage Show to urge the Show's termination, which clearly implied active support by the Board of Supervisors."
Said TRN CEO Mark Masters: "It is unbelievable to me that a city that purportedly prides itself on tolerance could be so intolerant of Michael's freedom of speech. This is how he makes his living and they would try to take this away from him...Savage is well known for using satire and ridicule to illustrate his political points, and clearly no more actually intended the death of fasting protesters by this quip than would a parent responding to a child threatening to refuse to eat vegetables with the statement 'so starve to death'." Savage indicated that he considers this to be "dry run" against freedom of speech in America. He states: "I am the target of this dry run. They want to see how far they can get in silencing a voice of freedom in the United States of America."
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Ad Business Report TM
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TWCRN tops with sports nets
The Weather Channel Radio Network (TWCRN) now provides football game day forecasts to ESPN Radio and extended coverage to Fox Sports Radio, making it now the leading provider of weather info to sports networks. ESPN Radio includes forecasts for both NCAA and NFL games. TWC Radio Broadcast Meteorologist Sally Russell will broadcast forecasts for several key college and NFL match ups of the week during "Football Friday with Doug Gottlieb," which airs from 4-7 p.m. ET. Jennifer Narramore, also an RBM at The Weather Channel and an avid football fan, provides weekly NFL forecasts for the Monday night football game on ESPN Radio's "Monday Night Countdown with John Seibel" from 4-8:35 p.m. ET.
 Westwood One and
Bill O'Reilly re-up
Now it's official: Westwood One announced a new agreement has been reached to continue distributing Fox News' The Radio Factor with Bill O'Reilly nationally. The show launched on May 8, 2002. "We continue to be very committed to Bill and his program," said Peter Kosann, Westwood One CEO. "As the recent announcement of new major market affiliates indicates, The Radio Factor remains a major force in radio and media." O'Reilly currently has some 400 affiliates.
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| Media Business Report TM |
Meredith acquires Directive Corp.
Meredith continued its program to beef up its Meredith Integrated Marketing with the acquisition of Directive Corporation, a specialized customer intelligence firm that leverages database strategy, analytics and customer asset management. Directive was formed in 2004 by a group of veteran marketing experts, led by Jack Wolf, former CEO of Targetbase, and Frederick Barber, former Executive VP of Conclusive Strategies. Directive's current clients include Suzuki, Petco, Pizza Hut and Rewards Network. Directive is the latest in a series of marketing services and interactive acquisitions by Meredith in the last 18 months that include interactive marketing companies O'Grady Meyers and Genex; word-of-mouth and Web 2.0 marketing specialist New Media Strategies and online health search engine Healia.
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| Media Markets & Money TM |
Close encounter in Charlottesville
Brokerage house Kalil & Co. tells us the Clear Channel has managed to close a third deal this week. This time, the buyer is another broker, Media Services Group's George Reed. Using the licensee name Sistema 102, he hnow owne an intact superduopoly cluster in the interior Virginia college market, including WCHV-AM, WKAV-AM and WCJZ-FM, all licensed to Charlottesville, along with WCYK-FM Staunton VA, WHTE-FM Ruckersville VA and WSUH-FM Crozet. According to documents filed with the FCC, the price is 7.75M. VP/GM Dennis Mockler is operating the cluster locally under the name Monticello Media.
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| Washington Media Business Report TM |
Shield law escapes committee
The effort to pass a federal reporters shield has been ongoing during the last couple of years. The measure has enjoyed bipartisan support, but is not popular in the Bush White House. The issue came to a head during the investigation of the outing of CIA agent Valerie Plame Wilson by US Attorney Patrick Fitzgerald, and former New York Times reporter Judith Miller wound up doing jail time for refusing to divulge a source, even though in her case she never even wrote a story on the topic. A shield bill has been approved by a 15-2 Senate Judiciary Committee vote. The Associated Press says it is likely to run into trouble on the Senate floor, where numerous tactics to amend, stall or kill it are available.
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| TVBR TV News |
 Three for DTV
Both Commerce Committees have now put the DTV transition on their dance card, but the real dancing may be coming from NTIA officials, since both the Senate and House have circled 10/17/07. The House will also be playing stakeholder trick or treat on 10/31/07. Meanwhile, Herb Kohl (D-WI), pictured, is introducing a new bill on the subject. Both the NTIA and FCC have been invited to the House 10/17 session. While the Senate notice mentions only NTIA's converter box coupon program specifically, it promises to look into "other issues related to a smooth and effective transition to digital television."
Kohl, chair of the Senate Special Committee on Aging, is introducing "Preparing Seniors for the Digital Television Transition Act of 2007," out of fear that not enough people are aware of the upcoming change and that government agencies involved in the transition are not operating in a coordinated fashion. "First and foremost, the bill would formalize a partnership between the FCC, NTIA, and the Administration on Aging (AoA) with specific reporting requirements," said Kohl. "The purpose of the partnership would be to coordinate with a diverse advisory board of stakeholders representing broadcasters, aging advocates, disability groups, rural Americans, and state and local governments to craft a national consumer education campaign targeting older individuals who depend on analog TV." The bill would also change the couponing strategy by prioritizing over-air households, and would provide grant money for local organizations which would specifically help seniors get from analog to digital, and would require PSAs from various stakeholders.
TVBR observation: Hmmmmmmm. More legislation. Every now and then we see a bill speed through Congress like an Olympic sprinter. More often, it snails though Congress, leaving a slime trail of time-consuming hearings, irrelevant amendments and arcane parliamentary tactics. So if and when this bill gets to President Bush for a signature, we're then going to hit the brakes on the DTV transition and start up a three-agency advisory board from scratch? Yeah, that sounds like a great idea. NTIA is planning to start issuing coupons 1/1/08, and the deadline is 2/17/09. All things considered, we believe it is best to stick with that plan and adjust on the fly if necessary. That means closely monitoring the demand and supply of converter boxes so that the retail shelves can be replenished in all due haste should demand be high. On the public education front, Kohl needs to have some faith the NAB, NCTA, CEA and other stakeholders will do what is sane and necessary to protect their livelihoods.
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| Transactions |
13.5M KLCL-AM/KNGT-FM, KJEF-AM/KHLA-FM, KJMH-FM & KTSR-FM Lake Charles LA (Lake Charles, Jennings, Lake Arthur, De Quincy LA) from Apex Broadcasting Inc. (G. Dean Pearce) to GAP Broadcasting Inc. (George Laughlin). 1.35M escrow, balance in cash at closing. Existing superduopoly. LMA 10/1/07. [File date 9/14/07.]
800K KAAI-FM CP Palisade CO from Todd Deneui to Covenant Educational Media Inc. (A. Fletcher Anderson, Bradley G. Wetherell, Beatrice Ward). 50K escrow, balance in cash at closing. Seller must reimburse FCC for bidding credit. Buyer is noncommercial entity. CP is for Class C3 on 98.5 MHz with 215 w @ 2,989'. [File date 9/17/07.]
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| Stock Talk |
Waiting for the jobs report
Traders were cautious yesterday on Wall Street, awaiting today's monthly employment report from the US Department of Labor. The Dow Industrials crept up six points to 13,974.
Radio stocks were slightly higher as well. The Radio Index rose 0.329, or 0.3%, to 124.952. Saga had the best day, up 4.6%. Citadel, however, fell 3.6%.
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| Radio Stocks |
Here's how stocks fared on Thursday
| Company |
Symbol |
Close |
Change |
Company |
Symbol |
Close |
Change |
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Arbitron
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ARB
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45.52
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-0.19
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Google
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GOOG
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579.03
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-4.99
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Beasley
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BBGI
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7.51
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+0.10
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Hearst-Argyle
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HTV
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25.65
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unch
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| CBS CI. B |
CBS |
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30.83
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+0.77
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Journal Comm.
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JRN
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9.78
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-0.19
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| CBS CI. A |
CBSa |
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30.85
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+0.80
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Lincoln Natl.
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LNC
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66.64
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+0.58
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| Citadel |
CDL |
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4.06 |
-0.15 |
Radio One, Cl. A
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ROIA
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3.75
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+0.04
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Clear Channel
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CCU
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36.99
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-0.16
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Radio One, Cl. D
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ROIAK
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3.76
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+0.04
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Cox Radio
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CXR
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13.44
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-0.01
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Regent
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RGCI
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2.65
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+0.07
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Cumulus
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CMLS
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10.45
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+0.03
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Saga Commun.
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SGA
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8.37
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+0.37
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Debut Bcg.
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DBTB
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0.98
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unch
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Salem Comm.
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SALM
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8.34
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+0.28
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Disney
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DIS
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34.90
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+0.18
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Sirius Sat. Radio
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SIRI
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3.40
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-0.06
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Emmis
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EMMS
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5.30
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-0.10
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Spanish Bcg.
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SBSA
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2.57
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+0.03
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Entercom
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ETM
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20.89
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+0.06
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SWMX
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SMWX
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0.04
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unch
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Entravision
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EVC
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10.13
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+0.09
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Westwood One
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WON
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2.89
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-0.07
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Fisher
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FSCI
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50.05
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+0.23
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XM Sat. Radio
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XMSR
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14.14
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-0.09
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Bounceback
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 We want to
hear from you.
This is your column, so send your comments and
a photo to [email protected]
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Below the Fold
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Ad Business Report
Westwood One & Bill O'Reilly re-up
TWCRN tops with sports nets...
Media Business Report
Meredith acquires Directive Corp.
Specialized customer intelligence firm that leverages database strategy...
Media Markets & Money
Close encounter in Charlottesville
SeemsClear Channel has managed to close a third deal...
Washington Media Business Report
Shield law escapes committee
Measure has enjoyed bipartisan support, but is not popular in the Bush White House...
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Stations for Sale
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 Market your Stations For Sale
in our daily epapers.
Contact
June Barnes
[email protected]
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Radio Media Moves
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BE names Roark CEO
The board of directors of Broadcast Electronics announced Joseph W. Roark has been appointed CEO, effective immediately. Roark joins Broadcast Electronics after having served as President over four Weir Group companies and two Danaher (Fortune 500) companies. The announcement is accompanied by word that John Pedlow is retiring after eight successful years as company CEO.
 Upped at Interep
Interep's CBS Radio Sales has promoted Toby Schlesinger to Vice President, Sales, based in New York. Schlesinger joined Interep in 1994 as an Account Executive for Infinity Radio Sales, now known as CBS Radio Sales. She previously worked at Buckley Broadcasting and Blair/Banner Radio Sales.
Factory job
Karen Peterson has joined The Content Factory, Jimmy de Castro's content and syndication firm. Peterson, who most recently worked for Premiere Radio Networks in affiliate relations since 2000, starts immediately and has full responsibility of the affiliation process for "The Dan Patrick Show" and WEB BUZ, topical podcasts that deliver specially catered news appealing to targeted radio station listeners. "The Dan Patrick Show" recently launched in Los Angeles and is syndicated over several different radio stations in large markets across the country.
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More News Headlines
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RIAA wins music sharing case
The record industry was successful yesterday in the first online music sharing case ever to go to trial. A jury in Duluth, MN found Jammie Thomas liable for copyright violations, ordering her to pay 9,250 bucks for each of 24 song downloads, or a total of 222K. The verdict gives RIAA ammunition to continue to go after illegal online music sharing. "This is what can happen if you don't settle," warned an RIAA lawyer.
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RBR Radar 2007
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Radio News you won't read any where else. RBR--First, Accurate, and Independently Owned.
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WW1 stock up on CBS deal
Westwood One shares rose Wednesday, but not dramatically (only single digits), after sealing a long-awaited deal to separate its management from CBS Radio but continue its programming and distribution deal with CBS Radio through March 2017 (10/3/07 RBR #193). Wall Street analysts say the deal removes some uncertainty for WW1, but there are still issues remaining to be dealt with. Wall Street guys took a look see, Bear Stearns note that the renegotiated deal will allow WW1 (stock ticker "WON") to focus on operations, put the company in a better position to negotiate an amendment of its bank covenants and free the company to pursue strategic initiatives. Goldman Sachs are sticking with their "Sell" rating. More details in RBR
10/04/07 RBR #194
Westwood One set free
in new deal with CBS
At long last, Westwood One announced that it has entered into new agreements with CBS Radio running through March 2017. the new deal, once ratified by WW1 shareholders, will establish a new relationship between CBS Radio and the WW1 network and Metro Networks divisions, through March 31, 2017 in exchange for certain programming and/or cash compensation.
RBR observation: Let the bidding begin! This is the move that Wall Street awaited. Now free from CBS, Westwood One is free to put itself up for sale. Who will Norm Pattiz, with his founder's stock, find a suitable buyer? Inquiring minds want to know. For the complete details see this report page in RBR.
10/03/07 RBR #193
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Affiliate Sales Rep
WOR Radio Network's (WRN) needs an exec with Passion for Talk Radio. Self-starter w/ 2-5 yrs experience. Work independently and achieve goals to increase market coverage and audience delivery for our Nationally Syndicated programming. Business is about relationships and candidate with strong database in Talk Radio will win big time. Offering competitive salary + commission plan, health insurance and 401K. WRN is the place to be to succeed with stability. See Radio Careers
General Manager
Midwest & Life is good with this Small-Medium cluster in rated market. Top Aggressive, community minded GM needed. We're reentering ownership so don't be concerned that you're already working for us. Have a track record of performance, strong on sales and ideas. Ability to get the most out of a talented staff. Tired of the corporate jungle and want to work in real radio. This GM post for the person with Radio Passion. See Radio Careers
General Sales Manager
America's Legendary CHR station, KDWB, looking for a world class GSM to lead a talented sales team! We have 5 questions for our next GSM to answer. If you can say Yes to some or all then lets talk. A college degree is preferred with two years related experience and/or training, or equivalent combination of education/experience. Clear Channel's KDWB, EEO--Hey, it doesn't get any better than this. 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.
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