RBR's Morning E-Paper

Volume 21, Issue 198, Jim Carnegie, Editor & Publisher

Monday Morning October 11th, 2004

NAB Overview

San Diego: Politics, Stern and continuing challenges for radio
The NAB Radio Show in San Diego wrapped up Friday with a political focus - - appropriate since it was the same day as the second presidential debate. But the week was dominated, as he'd obviously planned, by talk of Howard Stern's move to satellite in 2006. For now though, Gary Fries warned of a more immediate problem and told broadcasters they need to get out of a "bunker mentality" and get back to growing their business. We wrap up the 2004 NAB Radio Show.

RBR observation: Attendance in San Diego may have been a few hundred below last year's show in Philadelphia (which is the destination again next year), but that was to be expected from having fewer stations nearby. Having the entire event inside a large hotel made the event very comfortable and accessible. The exhibit floor was on the smallish side, but well attended and vendors reported good activity. With post-consolidation attendance leveling out in the 3,500-4,000 range, the Manchester Grand Hyatt was an ideal location. As for 2005 all the signs NAB had up point the road back to Philly. This road for many next year will be very rocky as the Publisher Perspective below tells it like it is and will be not just for radio but television as well. Now we would like to hear word from the NAB Executive on the process of finding the successor to Mr. Eddie Fritts. | More... |

Publishers Perspective

NAB Radio Show
How do you rebuild a quality product?
I had a group exec call me in San Diego who had attended most of the sessions. He said everything we had printed in "Naples is Calling" forecasted what's going on today in radio five months ago. "Jim," he said, "You need to collaborate this. We need this pacing. You gave us a wake-up call five months ago and nobody listened to you. But look what happened to you. Those big media moguls chastised you, they made you Christ on the cross. They nailed your ass to the slats. Now, you're right. What you said is coming true and they are scurrying to make it happen. Stern moving to the satellite. This is going to be a wake-up call, where Les Moonves has already said his radio division is starving for money. The GM has had the worst job of cut, cut, cut, slash, slash, slash." | More... |

Radio News ®

The thawful truth: Deal freeze is over
The Office of Management and Budget (OMB) has cleared the new FCC applications, signalling an end to the freeze on deals which began last month. The new forms - - FCC 301, FCC 314 and FCC 315 - - are online and available for immediate use. The latest deal freeze, the third since the stalled FCC rulemaking of 6/2/03, came about when the FCC was unexpectedly allowed to implement a portion of its court-delayed proposals. The change involves a new way to define radio markets, abandoning the overlapping signal contour method and replacing it with one keyed to Arbitron/geographical designations. An FCC release states "...the Media Bureau is lifting the temporary freeze on the filing of commercial radio station forms 301, 314, and 315 applications and amendments." Pending applications "...must be amended to demonstrate compliance with the new local radio ownership rules or to request a waiver of these rules..." and must also demonstrate compliance with cross-ownership rules. A significant change involves joint sales agreements (JSAs), which are now attributable to the leasing owner when counting stations to determine compliance with the local cluster cap.

Hot air balloon hits KKOB Albuquerque tower
A hot air balloon became entangled in KKOB-AM's radio tower on the final day of Albuquerque's world-famous balloon festival Sunday, forcing the pilot and two young passengers to shimmy most of the way down the nearly 700-foot-tall structure. Bill Chapel was piloting the Smokey Bear balloon when it blew into the stick near a park where the Albuquerque International Balloon Fiesta was being held. The hot-air balloon's canopy got wrapped up around the triangular-shaped tower, leaving its gondola resting up against the structure. Chapel, 69, and passengers Aaron Whitacre, 10, and Troy Wells, 14, then began the long climb down the tower's ladder. KKOB-AM shut down its 50,000-watt transmitter and emergency crews gathered at the base of the tower, Kathie Leyendecker, festival spokeswoman told the AP. About 100 feet above the ground, workers met the three, secured them with safety gear, and helped them into a utility truck bucket. Leyendecker said tower maintenance crews arrived to get the balloon down. The balloon's canopy was the shape of the face of Smokey Bear, the Forest Service mascot that warns against forest fires. Here's the footage.

Indecency fines scrubbed DoD bill
A rider to a Department of Defense authorization bill which would have raised FCC indecency fines to a cap of 500K dollars was taken out due to disagreement over the Senate's inclusion of language reversing the FCC's 6/2/03 ownership ruling. It was indeed the poison pill to House members it was predicted to be. The DoD bill is must-pass, and it was determined not to have it bogged down over an entirely separate matter. Attempts to modify the bill, spearheaded by John Engign (R-NV) failed to take hold. Ensign's compromise would have stripped language attacking the FCC ruling, as well as language from Ernest Hollings (D-SC) which would have addressed TV violence. It also would have provided for fines against individual performers. There was a great deal of reluctance of some to exclude the FCC language, particularly the Senate's anti-media-consolidation spearhead Byron Dorgan (D-ND).

RBR observation: It seems extremely unlikely that anything can be put on the books before Election Day. However, another in a long series of lame-duck sessions is expected to be necessary this year, and it is possible an attempt to get a clean bill through will be made at that time. Bottom line. It is possible that parts of the bill, especially huge fines against non-licensees, may fail to pass court scrutiny. Indeed, it is possible that the FCC's entire body of indecency regulation and enforcement may be gored on the horns of the judiciary. Regardless, somehow, sometime Congress is going to get something on the books - - support on the Hill is nearly universal.

Adelstein on the bubble
If the name of FCC Commissioner Jonathan Adelstein is not submitted to the Senate for a full term before the 108th Congress adjourns, he could be out of work - - and adjournment could come any day now as Hill denizens scurry home to campaign for re-election. The expiration date on Adelstein, who is filling out the term of Gloria Tristani, is already past. He can stay in his seat as long as the current Congress is in session, but the clock is ticking. The White House has shown no inclination to put his name back into play, despite Adelstein's widespread bipartisan support. He has been caught between the WH and his former boss, Tom Daschle (D-SD). It is thought that the WH is withholding the nomination in hopes of getting some sort of political advantage out of it. Members of the Senate Commerce Committee from both parties have twice sent letters to President Bush urging his renomination. And while it goes without saying that Adelstein is supported by Daschle, it is noteworthy that he is also supported by Daschle's opponent in the hotly-contested race for Senate in South Dakota, former Rep. John Thune. The bell will not necessarily toll for Adelstein in the next few days, however. It is widely expected that Congress will be forced into another in a string of lame duck sessions, which would open another window of opportunity.

Sirius announces 290 million offer of stock, debt;
times indeed looking better
Days after announcing it has Howard Stern come 2006, Sirius on Friday announced a public offering of 25 million shares of common stock, and$200 million in principal of convertible notes due 2011. Morgan Stanley & Co. Incorporated was the sole underwriter for both offerings. The offerings are expected to close on 10/13. The news of Stern not only sent Sirius stock prices higher but had some analysts like Kit Spring of Denver-based Stifel Nicolaus saying the announcement "increases the likelihood that Ford goes ahead with a factory install program...and could be potentially announced at the Detroit Auto Show in January." IRG Research also upgraded Sirius stock last week from "Neutral" to "Buy" on the news and raised its 2005 subscriber estimate from 1.96 million to 2.8 million. And lastly, there was an interesting comment from Stern on Friday's show that implied Viacom could buy Sirius: "Maybe Viacom's going to get involved. Viacom, my friends and hopefully, my business partners in the future." Stay tuned, as they say.

Will the FCC miss Howard Stern?
What do you think? Here is a statement from FCC Chairman Michael Powell, as reported by USA Today. "Satellite radio is one of the many technologies that the Commission is strongly promoting to expand the diversity of choices for the American public. It is not surprising that notable performers and journalists are turning to a medium that allows them to paint with a broader palette." Stern is heading to space of his own volition, although he clearly has seen the handwriting on the wall. He follows, most notably, Opie & Anthony, banished from radio by former employer Viacom over the infamous St. Patrick's Cathedral Sex for Sam stunt - - the indecency of which remains in question - - and laid-off former NPR newsman Bob Edwards.

RBR observation: We note in passing that it the FCC isn't, or shouldn't be through with Stern yet. It issued a 495K fine against Clear Channel for a Stern show heard over six of its stations, but has yet to fine any of the other stations which carried the exact same program, many of them belonging to Viacom. If they could figure out Stern was indecent on Clear Channel, why haven't they been able to figure it out for all the many other owners that have a piece of the Howard?

Adbiz ©

Univision locks down groundbreaking
deal with Miller
The latest in media and advertising's quest to court the very important and fast-growing Hispanic-American dollar: Miller Brewing and Univision unveiled a major cross-platform advertising and marketing deal. The 100 million-plus, three-year agreement includes on-air advertisements, expanded property sponsorships and ownerships, brand integration and PSAs on the following Univision outlets: | More... |

Pier 1 chooses Deutsch and OMD after review
Deutsch has reportedly won creative on Pier 1's 60 million account following a review that included Fallon NY, Publicis & Hal Riney San Francisco, The Loomis Agency Dallas and Laird & Partners NY. OMD NY scored media duties in a separate review that included Initiative Media and Mindshare. The incumbent for both creative and media were with Campbell-Ewald Detroit.

ANA "Masters of Marketing" wraps up in Naples
The ANA "Masters of Marketing" was the overall theme for the 2004 ANA Annual Conference held 10/7-10/10 at the Ritz-Carlton Naples, in Naples. This three-day program focused on issues critically important to ANA Members, including Building Successful Brands, Marketing Accountability and ROI and Marketing Innovation/Creativity. The agenda featured a mix of keynote addresses and breakout sessions delivered by chief marketing officers of leading national and international corporations. Ron Insana of CNBC served as the emcee; The New York Times Luncheon Speaker was Pulitzer Prize winner, historian, PR man and politician William Safire. Featured speakers included: | More... |

Media, Markets & Money tm

Casper deal is as easy as ABC
KTWO-TV - - that's K-TWO, actually, in honor of its dial position, is being sold. The Casper WY ABC affiliate is going to Cheryl Kaupp's K-TWO TV of Wyoming for a total of up to 1.7M dollars in cash and debt assumption. Arkansas firm Equity Broadcasting Corp. is the seller. The cash portion of the deal amounts to 1.2M, some of which has already been paid out according to terms of the contract. Debt assumption adds as much as but no more than 500K to the bottom line. The station has an STA to run its DTV operation on Channel 17. A TBA was put in place 3/1/04.

Earnings from all over
Strap on you seat belt as we skim the financial surface for a number of companies, including Salem Communications, Cox Radio, Tribune Broadcasting, Sinclair Broadcast Group, NBC Universal and Granite Broadcasting. | More... |

Washington Beat

Open meeting bereft of broadcast issues
Members of the broadcast and cable community can take a break when the five FCC commissioners sit for their monthly open meeting this week on Thursday, 10/14/04. There are six agenda items, none of which have much immediate impact on radio, television or cable. We expect, however, that it is only a matter of time before we have another round of heavy lifting on the way to the digital television conversion.

Monday Morning Shakers & Makers

Deals: 8/30/04-9/3/04
The sum total of station trading in this montly changeover week returned to the doldrums, although there was a respectable amount of volume. Three multi-market radio deals accounted for most of the value. Almost all the action was in small or unrated markets.

8/30/04-9/3/04	Total
Total Deals	15
AMs	15
FMs	12
TVs	1
Value	30,125,000

| Complete Charts |

Radio Deal of the Week
When the Saints go marching out...
| More... |

TV Deal of the Week
Washington moves into Montana
| More... |

Transactions

KTGF-TV Great Falls MT from Max Media of Montana to Destiny Communications LLC

WKOE-FM Atlantic City-Cape May NJ (Ocean City NJ) from Ocean Communications Broadcasting LLC to Millennium Radio Group LLC.

WCGB-AM Juana Diaz PR from Grace Broadcasters Inc. Calvary Evangelistic Mission Inc.

| More Details |

Stock Talk

Hey, it wasn't your fault
Broadcasting issues, like most issues of any kind, took a hit on Friday. But there wasn't much you could have done about it, short of landing someone like Bill Clinton to anchor your morning news program. The jobs-created report fell about two-thirds of the way short of the keeping-up-with-the-population point, which is in the 140K-150K neighborhood. That spooked the herd on the Street, and just about everybody's stock price was trampled.

Radio Stocks

**Here's how stocks fared on Friday**
Company	Symbol	Close		Change	Company	Symbol	Close		Change
Arbitron	ARB		37.06	-0.86	Jeff-Pilot	JP		49.40	-0.39
Beasley	BBGI		15.02	+0.02	Journal Comm.	JRN		17.35	-0.36
Citadel	CDL		13.10	-0.12	Radio One, Cl. A	ROIA		13.80	-0.44
Clear Channel	CCU		31.05	-1.00	Radio One, Cl. D	ROIAK		13.69	-0.41
Cox Radio	CXR		14.63	-0.16	Regent	RGCI		5.54	-0.01
Cumulus	CMLS		14.00	-0.34	Saga Commun.	SGA		16.80	unch
Disney	DIS		24.85	+0.10	Salem Comm.	SALM		24.41	-0.49
Emmis	EMMS		18.22	-0.47	Sirius Sat. Radio	SIRI		3.70	-0.30
Entercom	ETM		32.20	-0.59	Spanish Bcg.	SBSA		10.19	+0.04
Entravision	EVC		7.60	-0.35	Univision	UVN		30.82	-0.50
Fisher	FSCI		47.11	-0.44	Viacom, Cl. A	VIA		35.21	-0.35
Gaylord	GET		31.10	-0.04	Viacom, Cl. B	VIAb		34.61	-0.52
Hearst-Argyle	HTV		24.97	+0.08	Westwood One	WON		20.12	-0.20
Interep	IREP		0.80	-0.05	XM Sat. Radio	XMSR		28.17	-0.18
International Bcg.	IBCS		0.02	unch	-	-	-	-	-

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Bounceback

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September Digital Magazine

Complimentary Report

Quarterly Deals:
4.1 Billion spent on broadcast properties since the thaw
RBR/TVBR Observation:
Where is the action? We got it.

Less is More
CCU's already meaning less with syndicators and nets.

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RBR Radar 2004

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Commissioners back off
on news indecency
Some TV and radio stations have already been using delay systems for live news coverage in order to avoid any FCC citation for an indecent comment hitting the air, but two Commissioners appearing at the NAB Radio Show in San Diego insisted that those fears are unwarranted. 10/08/04 RBR #197

Eddie Fritts warns
of license challenges
Warned that groups targeting broadcasters have "raised the decibel level in Washington" and that organized attacks on radio and TV licenses are taking place as never seen before. "Bottom line - - these groups are out for your licenses, or at the very least to affect the program content of your stations - - and they aren't going away anytime soon. 10/08/04 RBR #197

Gary Fries: Get out of the bunker
While the economy may be slow, he insists that radio is not losing ground and the industry should be working on building share. "There is no erosion. There is no cancer," insisted that the gloom and doom is overstated, but did say there are challenges that the radio industry does need to address. One, of course, is spot loads, which he said is "critical" and is one of the top issues today in radio. "We need better creativity," Fries warned. If we don't solve these problems we could become a secondary medium," 10/08/04 RBR #197

Group heads bristle at
Stern flacking Sirius
Howard Stern irritated his current affiliates by spending a of time show on what was essentially an infomercial for Sirius. That did not go unnoticed in the group head session at the NAB Radio Show in San Diego. With three Stern affiliates, Citadel is one of the largest affiliate groups outside Infinity. Citadel COO Judy Ellis was clearly irked by Sterns actions and said she was evaluating how much time Stern spent flacking for Sirius outside his show's allotted spot load. "I'm gonna charge them," 10/08/04 RBR #197

Stern moving to Sirius, reaction muted at NAB in San Diego
It was the big "gee whiz" topic in the halls of the NAB Radio Show in San Diego - - "did you hear about Howard Stern?" But despite the interest from a gossip point of view, there appeared to be little concern that Stern's defection to satellite radio will have any big impact on the terrestrial radio industry. That may be because so many of the stations which carry Stern are owned by Infinity which, with parent company Viacom, is not a member of the NAB.
RBR observation: This is a shot in the arm for both satellite firms. Stern is the first big national talent to cross over the air waves. At this point it is it doesn't matter if Sirius stock moves the key is having the talent and content with the potential for all the cult listeners of Stern to follow with the purchase of satellite radio. Like in real-estate it only takes that right one to walk through the door and say sold. Stern is the first part of the issue of here comes da satellite. The next factor is seeing who and or what Infinity and affilates will follow with when Stern is off the air. Bets are now being placed on: Will Infinity pull Stern immediately or leave him on the air to pump his move? This is not going to be an easy replacement. 10/07/04 RBR #196

Viacom and SBS pact for cross-platform assault on Univision
Les Moonves, Co-President/Co-COO of Viacom said his next move was the Hispanic consumer now he will do it with a strategic alliance targeting Hispanic consumers through a multimedia platform that would include radio, TV and outdoor throughout the US. Partner is Raul Alarcon, Chairman/CEO of SBS.
RBR observation: Forget about this move going against Clear Channel's recent announcement to convert 20-25 stations to Spanish-language, this is head-to head with Univision. This is Viacom's big move into the Hispanic marketplace. Viacom cable nets could be converted to Hispanic programming and may come up with additional nets. This is a very strong move for SBS as well. With cross-platforming, SBS can build larger stations and really get penetration in perhaps larger markets in the Southwest. Viacom now has access to is the #1 Hispanic language station in LA, NY, Miami and possibly San Francisco when the KBAA format switch is done. Interep will benefit as well, as it currently reps Infinity and SBS stations. Infinity will likely decide, a la Clear Channel, to convert some of their weaker-performing stations to Hispanic as well. Remember, radio is a bigger force in the marketplace for Hispanic than it is for general. 10/06/04 RBR #195

Two more glum views
from Wall Street
James Marsh at S.G. Cowen & Co. and Gordon Hodge at Thomas Weisel Partners have lowered their estimates for Q3 and Q4 - - and say 2005 is looking iffy as well. Marsh is estimating that September radio revenues were up 2.8%, just enough to make the quarter flat after the losses of July and August. But he believes national spot was down 2%, finishing in negative territory for each month of the quarter. Hodge has cut his 2004 growth estimate to 1.7% from 4.3% and 2005 to 2.3% from his previous 5% and 2005 estimates not much rosier. 10/05/04 RBR #194

Emmis, Bonneville pull
a blockbuster swap
Cash, licenses and no small amount of radio station hardware will be changing hands as Bonneville sends WLUP-FM Chicago and 70M dollars to Emmis in exchange for three stations in Phoenix. All told, RBR estimates 210M in value is going in each direction. Bonneville, while retaining four FMs in the Windy City, gains entry into another top-20 market, getting AC KKLT-FM, Newser KTAR-AM and Sports KMVP-AM. RBR observation: Is the dealing done? We don't think so. Emmis retains what is now an orphan in the age of consolidation. That'd be KKFR-FM in Phoenix. We will not be at all surprised to see the Urban Contemporary outlet sod to either an in-market owner or a format specialist. Radio One, are you reading this? 10/05/04 RBR #194

FCC tries to pull
consumers into DTV
Get it!" is the theme of FCC Chairman Michael Powell's new initiative to tug the American viewer into the digital TV transition. A new web portal - - www.dtv.gov - - has been launched as a one-stop information source for consumers ready to take the plunge. Powell hopes concumser will get DTV - - get the set, get the connection, get the content. TVBR observation: Ok Mr. Powell since you will not let consumers go it alone how about shipping us three digital sets but no smaller than 35 inch flat screen. Education is important but it will not come from a dot gov website. NAB President/CEO Eddie Fritts said it the best in April 2002, DTV, then, is a consumer driven product. His statement still holds true today. 10/05/04 TVBR #194

General Sales Manager
Los Angeles. Opportunity of a lifetime. 5 years radio sales management experience. EEO. Reply to: [email protected]

Local Sales Manager
Cumulus Broadcasting of Shreveport seeking a LSM. The person hired for this very important position will have the ability to train, motivate, write and supervise proposals, close sales with A/E's and hit or exceed monthly and quarterly local sales budgets.

See Radio Careers for more info on this once in a lifetime shot.

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