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Welcome to RBR's Daily Epaper
Volume 24, Issue 199, Jim Carnegie, Editor & Publisher
Thursday Morning October 11th, 2007

Radio News ®

Another down month
It's not likely a surprise to anyone that August was another soft month for radio ad sales. Indeed, the official tally from RAB shows a decline of 1%. Local was down 1% for the month, but it was national that took the big hit - down 5%. Combined, spot revenues fell 2%. As usual, non-spot was up sharply and picked up some of the slack. Non-spot rose 11% in August, bringing the grand total to minus 1%. If you're keeping track, radio revenues have now been down year-over-year for four straight months.

Another analyst likes XM/Sirius
An analyst from Citi Investment Research is guestimating a 60% chance that the proposed merger of XM Satellite Radio and Sirius Satellite Radio will get all necessary thumbs pointed up. Citi's Eileen Furukawa said that if it does go though, it could lead to up to 7B in savings for the combined entity. That had the effect of shooting stock prices up for each last Monday, with XM rising 1.05 and Sirius rising 0.13 per share. A vote from shareholders of the two companies is on the calendar for 11/13/07. DoJ and FCC approval is also required. The FCC's Kevin Martin (R) has indicated that the Commission will stick to the normal merger shot clock, which would indicate a decision before the year is out. He also said approval will face high hurdles. Commissioner Michael Copps (D), an anti-consolidation force to begin with, has expressed misgivings about allowing the merger to go through.

RBR observation: Nobody doubts that the merger would be good for XM and Sirius. The question is whether it would be good for consumers. Since both companies say they are solvent and that the merger is not a requirement for their continued operation, there is absolutely no reason to abandon the Economics 101 principle of competition between the two, which was a key foundation of their original license grants. Despite all the efforts by various analysts to gauge the likelihood of approval based on the perception of which way the FCC is leaning, the other half of the equation is the DOJ. We have seen absolutely nothing to change our initial view that the approval likelihood is about 10%.

Wyoming tax structure best for business
So says the Tax Foundation, which just released its 2008 State Business Tax Climate Index, which takes a number of tax facts into considerations, weights them according to their affect on business and then ranks the states. Wyoming came out on top, while Rhode Island brings up the rear. Curtis Dubay, the study's co-author, said, "There's no question that states are competing with one another for companies, jobs and people. Taxes matter to businesses, and the states with better business tax climates will reap the rewards." The Tax Foundation notes that there are many aspects of the increasingly globalized economy that are out of a state government's control, but that this is not one of them. "The index measures how well a state's tax system encourages investment by maintaining a broad tax base and low rates," said the Tax Foundation. Chris Atkins is the other co-author. Rounding out the top five after Wyoming are South Dakota, Nevada, Alaska and Florida. The five least favorable business tax environments, moving up from the Rhode Island basement, are New Jersey, New York, California and Ohio.
| See your state here |

Zell holding onto the LA Times
Sam Zell was speaking in LA this week, so of course the Q&A session got around to the hometown newspaper. Several rich locals have expressed and interest in buying the Los Angeles Times, but Zell says he has no plans to sell - unless someone really wants to pay a strong price. Zell has insisted all along that keeping together the broadcast-newspaper crossownership combos of Tribune Company is key to growing the company going forward. So far, since he became an investor and a member of the board, all that Tribune Company has put up for sale is the Chicago Cubs and its studio complex in LA. Zell insisted this week that he has no idea which bidder is going to end up with the Cubs, except, "it ain't gonna be me." Based on the stock price spread, Wall Street has grown pessimistic about Tribune Company being able to complete phase two of its plan to go private, with Zell and an Employee Stock Ownership Plan as the owners. Tribune management has insisted that its financing commitments are solid for the buyout, which is still awaiting needed regulatory approvals. A recent report by Lehman Brothers analyst Craig Huber, however, put the chance of closing the buyout at only 50-50. Thus, the stock has been trading well below the 34 bucks per share buyout price.

RBR observation: Although traders are worried about Tribune being able to hold the financing together in the current credit climate, we think the bigger problem is getting FCC approval of the crossownership waivers - and particularly getting them in a timely manner. Despite general Democratic Party opposition to media consolidation and waivers for big media companies, Tribune was able to line up Capitol Hill support, particularly from the Illinois delegation, from both sides of the isle. But as the election season draws nearer, it will be increasingly difficult to get the FCC to go out on a limb and grant a pile of waivers for one company. It doesn't help that Commissioner Michael Copps (D) recently expressed public concerns about granting waivers to Tribune. Copps appears to be frustrated that he is powerless to do anything about News Corporation acquiring Dow Jones & Company, a media merger he clearly detests, so that could make him more likely to wield the power he does have - against the Tribune-Zell deal.

Blackwater focuses attention in Iraq
Most of the time, the debate over US policy in Iraq gets more attention in the US media than do actual events there, but that was not the case during the week of 9/30/07-10/5/07, according to the latest news coverage study from the Project for Excellence in Journalism. The activities of private security contractor Blackwater fueled the coverage, getting particular emphasis at newspapers and online, and making events in Iraq one of only two stories to universally make top ten lists across five media outlet categories. The topic was downplayed on cable, however, and while radio gave it 10% of its attention, it doubled its focus on the policy debate, allowing continuing coverage of the 2008 campaign to edge out the Iraq story by 1%. The lack of a dominant third story led to scattered coverage elsewhere, with sports stories (baseball, steroids), tabloid favorites (Larry Craig, Princess Diana, Britney Spears) and global hot spots (Myanmar, Sudan/Darfur, Pakistan, North Korea) all getting enough play to show up somewhere on the various lists.
| Top ten lists here |

Wall Street Business Report TM
Journal sets share buyback
The Board of Directors at Journal Communications has given management a green light to buy back up to five million shares of the company's stock over the next 18 months. The buyback action supplements the five-million share repurchase authorizations approved in February 2005, April 2006 and May 2007. Through October 5th, Journal had repurchased a total of 13,423,200 shares of common stock, including 3.2 million Class B shares purchased from Matex Inc. in August 2007.

Ad Business Report TM

Network Radio Upfront update
As the annual network radio upfront negotiating season is just beginning, RBR/SmartMedia is providing a weekly progress update, based on conversations with buyers and sellers in the marketplace for our annual two-part print feature. This week, we look at excerpts: What is the marketplace looking like so far? It's changing a little bit. Last year Pfizer was in-a major player. Johnson & Johnson, which acquired Pfizer's Consumer Health Care division late last year, isn't as much of a major player in network radio. Still, there's good news out there. Considering the state of radio in 2007, networks are more optimistic about 2008. The upfront started slightly earlier and stronger than last year. Agnes Lukasewych, VP, Account Director Radio Broadcast, MPG agrees: "I expect that many of the bigger advertisers will place '08 well in advance of last year."
| Read More |

Maja Mijatovic:
Horizon Media Director of National Radio

Our apologies: In our October SmartMedia magazine, we incorrectly listed Horizon Media's Director of National Radio Maja Mijatovic as Senior National Radio Buyer. She's been getting quite a few calls on it, so we wanted to "makegood," pun intended! Maja became a director in October of 2005. She was promoted to manager from senior buyer in April of 2004.
| See our corrected annual Radio Upfront feature, Part I, here |

Media Markets & Money TM
Tidewater twosome up for auction
A pair of troubled AM stations in the Norfolk-Virginia Beach-Newport News are ready to be sold out of bankruptcy, but a chance is being offered for any interested parties to up the ante. There is a wide gulf between an earlier offer since withdrawn and the amount of money currently on the table. The stations are WVAB-AM 1550 and WBVA-AM 1450. R. Clinton Stackhouse, trustee for the stations, has a deal with TL Communications, headed by Terry Suggs aka Terry Love, worth 275K. This is a drop from a prior transaction filed with the FCC last November in which Nancy A. Epperson's Chesapeake-Portsmouth Broadcasting Corp. agreed to pay 775K for the stations, which would have added to three other O&O AMs in the market. That deal is now terminated, although Chesapeake is still running the stations under an LMA. Broker Ray H. Rosenblum is handling the sale of the station, and will get a chance to procure a better deal soon. Very soon. Next Tuesday, 10/16/07, the US Bankruptcy Court in Norfolk will hold a hearing on the matter along with a possible auction. Stackhouse is referring all interested parties to Rosenblum at (412) 362-6311.

Washington Business Report TM
Vermont noncom net rebuffs license challenge
Peter D. Moss picked a bone with Vermont Public Radio on 1/18/06, and just over a week later, Peggy Sapphire picked another. Moss was incensed that the network's stations, WVPR-FM Windsor, WVPS-FM Burlington, WBTN-FM Bennington, WNCH-FM Norwich and WVPA-FM St. Johnsbury, persisted in functioning as "nothing more than a regime propaganda tool...slavishly support[ing] the rotten conservative bushist regime line and lies." He partially blamed VPR's acceptance of federal money to operate the noncommercial entity, and said he would drop his objection if VPR stopped saying it was involved in public broadcasting and identified it as "federally subsidized" broadcasting instead. Sapphire, on the other hand, had a petition with "thousands of signatures" requesting that VPR air a program called "Democracy Now," which it opted not to do. As usual in cases such as this, there was no evidence of wrong-doing on VPR's part, and the FCC has little authority when it comes to programming decisions of responsible licensees. Neither the Moss nor the Sapphire objections could be honored.

RBR observation: Public broadcasters generally find themselves under attack for being too liberal, so this situation is notable perhaps as a case where one is found to be too conservative. Nonetheless, it is yet another ultimately frivolous license renewal objection which confers on the FCC far more power than it actually has. You gotta love that First Amendment.

Entertainment Business Report TM
Delilah signs with Harlequin for three books
Harlequin Enterprises, the seller of romance novels, will publish three non-fiction books by Premiere Radio Networks' popular evening/nighttime radio host Delilah Rene, based on the personal stories shared by her listeners. The books are the first "major" acquisition for Harlequin's non-fiction franchise, reported Bloomberg News. "Love Matters," the working title of the first book, planned for October, 2008, will also include stories about relationships sent to the radio host's website, Harlequin spokeswoman Heather Foy said. The other two books will be published in April and October, 2009.

Internet Business Report TM
With GPS, demand for location-based services growing
As more and more mobile devices come on the market with GPS capabilities, consumer demand for location-based services (LBS) such as navigation is growing. According to the latest Telephia research, LBS represented 51% of the 118 million in revenue that downloadable mobile applications such as LBS, weather applications, chat/community, and personal organization tools generated during Q2. In addition, more favorable carrier deck placement for LBS applications and the bundling of navigation services with data packages have contributed to record high downloads. However, overall consumer penetration for mobile applications hovers around 5%, as compared to penetration rates of 7-13% for other downloadable content like games, ringtones and premium SMS. LBS applications command a healthy price premium compared to other downloadable mobile applications. The average price per month for an LBS application is 9.23, as compared to a range of 3.82-5.41 for weather applications, sports, wallpapers/pictures, etc. Telephia also reported that:

* 13 million mobile consumers downloaded a mobile application on their phone.
* Of the 118 million in revenue that downloadable mobile applications such as LBS, weather applications, chat/community, and personal organization tools generated during Q2 2007, LBS represented 51%.

12M WLIE-AM Nassau-Suffolk NY (Islip NY) from Long Island Multimedia LLC (Stuart Henry) to The Principle Broadcasting Network New York LLC, a subsidiary of Mercury Capital III G.P. LLC (Charles W. Banta, Peter S. Handy, C. Teo Balbach, Sandra A. Miller). 5K earnest money, 735K escrow, 11.26M cash at closing. 11M goes to LIMM; 1M goes to Deer Park Properties for real estate. Seller may earn 1M or 2M extra depending on disposition of upgrades, which include CP to increase daytime power to 4.35 kW. LMA 1/1/07. [File date 9/26/07.]

650K WNRR-AM Augusta GA from Eastern Broadcasting Group Inc. (Michael J. Sbuttoni) to Will Nunley Broadcasting LLC (Will Nunley). Promissory note. [File date 9/25/07.]

Stock Talk
Time to stop and catch a breath
Stock prices were missed on Tuesday, a day after hitting record highs. The Dow Industrials pulled back 86 points to 14,079. But another advance by Google helped push the tech-heavy Nasdaq composite to another record close.

Radio stocks slipped. The Radio Index was off 0.860, or 0.7%, to 125.455. Westwood One fell 4.6% and Entercom was down 4.1%.

Radio Stocks

Here's how stocks fared on Wednesday

Company Symbol Close Change Company Symbol Close Change




















Journal Comm.







Lincoln Natl.




Citadel CDL
4.51 +0.13

Radio One, Cl. A




Clear Channel




Radio One, Cl. D




Cox Radio












Saga Commun.




Debut Bcg.




Salem Comm.








Sirius Sat. Radio








Spanish Bcg.
















Westwood One








XM Sat. Radio





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Below the Fold
Ad Business Report
Network Radio Upfront update
Agnes Lukasewych, VP/MPG expects many bigger advertisers will place '08 in advance...

Media Markets & Money
Tidewater twosome up for auction
Pair of troubled AM stations in the Norfolk are ready to be sold out of bankruptcy...

Washington Business Report
Vermont noncom net rebuffs
License challenge as Peter D. Moss picked a bone with Vermont Public Radio...

Stations for Sale

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June Barnes
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Radio Media Moves

40 years and counting
Clear Channel Tri-State (Sussex County, NJ) Market Manager Dick Taylor celebrates his 40th year in radio this month. Taylor started in radio at the age of 15 while still in high school back in his hometown of Pittsfield, Massachusetts. Taylor says he's seen the business go from records, transcription disks and reel-to-reel machines to CD's & carts to full computerization. And he's even more excited about radio's future as we head to the 100th Anniversary of Radio in 2020.

Stichweh reaches Critical Mass
Critical Mass, an interactive services firm, part of the Omnicom Group, has named John Stichweh as senior vice president, general manager. In this position, he oversees the daily management of the Toronto office and its contribution to Critical Mass' global operations. Prior to Critical Mass, Stichweh was director of global interactive marketing at The Coca-Cola Company.

More News Headlines

Lowe and Snow
to be honored

The Media Institute will bestow awards on Scripps CEO Kenneth W. Lowe and former White House Press Secretary Tony Snow at its annual Friends & Benefactors Awards Banquet October 16th in Washington, DC. Lowe will receive the American Horizon Award, while Snow will receive the Freedom of Speech Award. The master of ceremonies will be communications attorney and former FCC chairman Richard E. Wiley. The black-tie event will also mark the third annual National Freedom of Speech Week, October 15-21, 2007.

TVBR - TV News

Studios brace for writers strike
It is looking very likely that the Writers Guild of America will strike the Hollywood studios for the first time since 1988. Just when the strike could come is not clear, but negotiations with the Alliance of Motion Picture and Television Producers have failed to make much progress on the biggest issue - residuals from "new media" profits. "While the WGA remains determined to make a fair deal, at this stage of the negotiations the AMPTP is still stuck on its rollback proposals including profit-based residuals. Our members will not stand for that. The entertainment industry is successful and growing like never before. Writers, whose creativity is at the heart of that success and growth, are committed to sharing in it," said the most recent statement from the WGA negotiating committee. The current WGA contract with the studios expires the end of this month. A strike could be called any time after that if the union decides that talks are going nowhere. If the writers do walk out, it might have no immediate impact on TV schedules. Many shows for the current season are already in the can and there are scripts already written waiting to be shot. But, at some time, non-union writers might not be enough to keep production on schedule.

RBR Radar 2007
Radio News you won't read any where else. RBR--First, Accurate, and Independently Owned.

Westwood One
spells out CBS deal
The bottom line is that Westwood One is in a better financial position under the new agreement and CBS Radio stations have strong financial incentives to continue to clear WW1 spots. One analyst raised the question of what would happen if a CBS O&O station just quit clearing WW1 spots? That is, indeed, covered in the new agreement. Not only would WW1 save on its network comp payments, but would also receive liquidated damages if any CBS O&O station fails to clear 75% of the WW1 commercials it is supposed to broadcast for three consecutive months or four out of 12 months. Back to the basic agreement see RBR.

RBR observation: One other interesting aspect is that CBS Radio has the right to veto certain candidates for CEO of WW1 once the new deal goes into effect. Those are the people who served as CEO during the time that CBS Radio managed the company: Mel Karmazin, Joel Hollander, Shane Coppola and Peter Kosann. It will be interesting to see who next fills the chair.
10/10/07 RBR #198

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