RBR's Daily Morning Epaper

Volume 21, Issue 200, Jim Carnegie, Editor & Publisher

Wednesday Morning October 13th, 2004

Radio News®

Fox affiliates hit with 1M+ in indecency fines
A whipped cream sequence on a Fox reality show, "Married by America," and the banter that went along with it, has prompted the FCC to propose fining each and every station that aired the show seven thousand dollars. That works out to 1,183,000 (7K times 169 stations). The episode aired over a year ago, in April 2003.

RBR observation: Why did the FCC fine all stations this time, after fining only Viacom/CBS O&Os for Janet Jackson's Super Bowl halftime shenanigans? Unlike the Super Bowl flash, the FCC said Fox affiliates should have been well aware of what they were getting into by airing "Married by America." It cites, for example, the decision of WRAZ-TV Raleigh-Durham, NC to refuse to air the show because of its racy content. We would note, though, that the FCC has now dug itself into a hole by issuing so many fines. Just try to collect! For nearly three decades now, the Commission has been unable to find a single US Attorney anywhere in the United States willing to take an indecency case to court. We doubt that they'll have any more success today, so refusing to pay this 7K fine is a no-brainer for station owners. In fact, anyone who does pay is just throwing away good money and putting a black spot on their license come renewal time. | More... |

A light or just more tunnel?
Two more Wall Street analysts have weighed in with their views of the outlook for radio - - and they offer somewhat different perspectives. Lehman Brothers analyst Bill Meyers has cut his 2005 forecast, seeing no catalysts for growth. But at Banc of America Securities, Jonathan Jacoby notes pacing improvements in October and November and wonders whether this is the first sign of hope. | More... |

Pension funds want to nominate Disney directors

The nation's big pension funds are flexing their financial muscles, demanding a direct role in determining who is going to run The Walt Disney Company. Four pension funds owning more than 18 million Disney shares have submitted a proposal for the company's next shareholders meeting which, if passed, would give shareholder groups the right to nominate their own candidates for Disney's board of directors.

RBR observation: Pension funds have long been the sleeping giant of Wall Street, but the giant was awakened by the corporate scandals at Enron, Tyco and others. The big funds are now demanding a voice in how big companies are run and they're holding boards of directors accountable for making managers run their companies for the benefit of shareholders, not as their own personal kingdoms. While the pension funds supported Roy Disney and Stan Gold last Spring in their unsuccessful effort to oust Michael Eisner, the fund managers are making it clear that they are free agents - - ready to support which ever side of the battle is working for their best interests. It will be interesting to see whether the board of directors, long criticized for being too cozy with Eisner, will assert enough independence to win the support of the pension funds and their huge block of votes. | More... |

DNC, activists react to Sinclair
Reaction to the Sinclair anti-Kerry documentary story has been loud and widespread. FCC Commissioner Michael Copps and former FCC Chairman Reed Hundt have denounced plans to air "Stolen Honor: Wounds That Never Heal," and 18 US senators have fired off a letter to FCC Chairman Michael Powell demanding an investigation into the legality of the broadcast (see related story). And the Democratic National Committee has filed a complaint with the Federal Election Commission. | More... |

Washington-based Dems attack Sinclair
The group of senators, all Democrats, asked Powell to determine whether broadcasting the documentary "represents a proper use of public airwaves or if, instead, it would violate fairness rules now in place." "To allow a broadcasting company to air such a blatantly partisan attack in lieu of regular programming, and to classify that attack as 'news programming' as has been suggested would violate the spirit, and we think the text, of current law and regulation," they added. | More... |

Gannett has its eye on a return to radio
Don't get excited. After selling its 11-station radio group to Jacor and Chancellor (both now part of Clear Channel) for a total of 590 million dollars in 1996 and '97, Gannett is looking at getting back into the radio business - - but only in a small way. Asked about possibilities in his quarterly conference call, Gannett

CEO Doug McCorkindale said the company is only looking at small deals which might have some synergy with its newspapers.

RBR observation: Our advice to Mr. McCorkindale is to get in big or don't get in at all. Newspaper publishers with no experience in radio keep coming up with the same idea - - acquire a local AM to operate as a News/Talk arm of a daily newspaper. In practice, it doesn't work. Such a station will always be a weak standalone player in a local market dominated by clustered radio stations and it will generate less revenues and more headaches than ever envisioned by the publisher who thought that buying such a station was a good idea.

Confernce Calls Q3 2004

Q3 up double digits for Gannett
Q3 results looked pretty healthy at Gannett - - but its stock fell Tuesday because things aren't looking nearly as rosy for Q4 and beyond (see Radio News). Q3 revenues were up 11.3% to 1.82 billion dollars and earnings per share were up 14.6% to a dollar-18. That was a penny shy of the Thompson first Call consensus, but company officials noted that the consensus had been a penny lower until the end of last week when one more analyst added his two cents worth and push the average up a penny. Q3 TV revenues, including recently acquired Captivate Networks (an in-elevator TV ad service), rose 19.7% to 206.2 million and operating cash flow gained 34.4% to 106.6 million. The company said that revenue figure included 25-30 million from the Summer Olympics and 20-25 million in political advertising. Excluding Captivate, TV revenues were up 17.3% and operating cash flow gained 35.2%.

Adbiz©

Stolichnaya launches ''Frozen'' effort
Allied Domecq announced the launch of a multi-million dollar marketing campaign for the Stolichnaya family of products. Starting this month, the fully integrated "Frozen" campaign will drive more than 445 million consumer impressions through print and broadcast advertising, as well as promotions, reminding consumers that Stoli genuine Russian vodka is brought to its highest quality and flavor when chilled to the freezing point. Created by Publicis Worldwide, Allied Domecq's AOR, the ads depict a series of environments - - including a music studio, a billiards room and a living room - - in which everything is frozen, except the Stoli bottle. Print will run in such national magazines as FHM, Maxim and Playboy. Out-of-home ads will appear on billboards, kiosks and bus shelters in major metropolitan markets. While the kiosk and bus shelter ads will show the "frozen" room environments, the billboards will illustrate a bottle of Stoli nestled in a bed of snow, as if the entire billboard has been frozen. Each execution also features a "Best Chilled" stamp of authenticity, certifying Stoli's genuine Russian heritage and signifying the importance of consuming Stoli while it's ice cold. :60 radio spots will complement the print and outdoor ads in the same major metropolitan markets, and will further the concept of going to extremes to enjoy Stoli.

Premiere Innovative Marketing Group
creates "Gator" cereal
Premiere Radio Networks' Premiere Innovative Marketing Group (P.I.M.G.) and the Florida Gator Radio Network have created a limited edition breakfast cereal - - Florida Gator Frosted Flakes - - on sale now exclusively at Publix Supermarkets throughout Florida. Florida Gator Frosted Flakes are "sweetened corn flakes." The lively, colorful box is also a collectable keepsake for Florida Gator fans and delivers statewide exposure for the University of Florida in over 100 supermarkets. The front panel of the box captures shoppers' attention with Florida's bold orange and blue school colors and a color photo of the Gators in action on historic Florida Field. School mascot, Albert The Gator, also smiles out from the highly visual box. The back panel of Florida Gator Frosted Flakes cereal is sponsored by the Florida Dairy Farmers and is filled with fun facts and nutritional information about dairy products. "This has been a project in the works for a long time and the box is something that every Gator Fan will want to own" says Jay Freedman, P.I.M.G. VP. "It follows the tremendous success last year of Penn State Crunch, and we look forward to developing additional product for Sports Radio Network properties."

North Pole Network debuts for the Holidays
This year Santa and the malls have a brand new helper - - the North Pole Network Television. (NPN/TV) is the brainchild of Houston-based Dillard Local Branding. The new net's programming was created for DLB client World Wide Photography (WWP) and is scheduled to roll out this Christmas in 75 malls across the country, with over 350 malls already committed for the 2005 Christmas season. The DLB takes a captive audience, entertains them, and shows them products and services that will benefit them in an environment where all their shopping needs can be satisfied. By replicating real cable system channels with funny network parodies this year's potential audience of more than 1 million moms and their kids are going to be entertained by new original programming and promotions geared to their needs and wants. The net parodies include SNN - - the Santa News Network, with 11 year-old host, Wolf Blitzen and his field reporter, Skip Sleighme. A Home Shopping Network, which substitutes the Present Channel; A Cooking Channel featuring one of the top chefs in the US -- Scotty Campbell, (featured on Tops In Texas, in Time, Newsweek, and U.S. News & World Report); and Toons for Tots that features a toddler DJ. DLB has plans to follow up with character merchandising, POP collateral materials, and an interactive website where kids can download music, games, and email Santa their wish lists.

Jones Media Networks and Air America Radio
strike ad sales deal
[Due to a mix-up, this is the corrected version of a story which ran yesterday].
Jones MediaAmerica announced it will be representing Air America Radio for network ad sales, effective immediately. This, after Jacqui Rossinsky, EVP/Sales and Marketing and others left the company last spring in what was called a major restructuring (4/28 RBR Daily Epaper #83), (5/7 RBR Daily Epaper #90). Susan Love, VP Advertising Sales and Marketing, Jones MediaAmerica, told RBR she believes that Interep's individual market spot sales representation for Air America continues as before. "We are thrilled that Air America Radio has entrusted Jones with their ad sales," said Love. "JMA has a tremendous track record of building brands, and we expect that success to continue with our partners at Air America Radio." Doug Kreeger, CEO of Air America Radio states, "We have achieved extraordinary ratings in every market that Air America Radio has launched. We are extremely excited to have Jones MediaAmerica working with us, connecting advertisers with our successful affiliates across the country."

Media Markets & MoneyTM

CRL/Orban restructures Harman debt...again
Harman Industries has agreed to restructure the debt it's owed by Circuit Research Laboratories (CRL) from the 10.5 million dollar sale of Orban in 2000 and let CRL clean up its books. 8.5 million of the initial purchase price was in the form of a seller note and CRL (which has taken to calling itself CRL/Orban) has had to restructure that note more than once to remain solvent. But Harman has recently converted over 2.1 million of debt to CRL/Orban stock, which it then sold, and has now agree to accept a one million dollar cash payment, forgive some of the interest it is owed, convert 2.4 million in debt to CRL/Orban stock and reduce the remaining note to 3.2 million, which will be booked as a long-term debt on CRL/Orban's financial reports. The new loan bears interest at 11.5% and requires monthly interest-only payments, with the principal to be paid back in five annual installments beginning in September of 2005. As a result of the transactions, Harman will own a 19% stake in CRL/Orban going forward. "Now it's in the history books, four very long years after the Harman loan was created in connection with our purchase of the Orban assets. This significantly cleans up our balance sheet and represents a new beginning for the company," said CRL/Orban President and CEO Jay Brentlinger in announcing the debt restructuring.

Close encounters of the western kind
Jody McCoy of brokerage Media Services Group reports that the sale of KKXK-FM, KUBC-AM and KBNG-FM in the Montrose-Ridgway area of Colorado has closed. The stations are now under the care and feeding of Joe Schwartz and his Cherry Creek Radio. Seller Woodland Communications received 3.2M dollars. The Kanza Society now has the keys to KAEZ-FM in Amarillo, according to John Pierce of John Pierce & Co. and Marc Hand of Public Radio Capital. The seller was the Stephens Family, which received 1.25M dollars. Kanza is operating the station under the name High Plains Public Radio.

Scripps buys GAC from
Jones Media Networks
Jones Media Networks is cashing out of the cable TV network business, selling its Great American Country (GAC) to E.W. Scripps Company for 140 million dollars in cash. GAC, a 24-hour country music video network, will become part of Scripps Networks - - the cable network unit that for some time now has been the fastest growing part of the Scripps company. GAC will be the fifth network for Scripps Networks, which currently owns Home & Garden Television, Food Network, the DIY (Do It Yourself) network and Fine Living. Scripps also owns the Shop at Home Network, which is operated separately, plus on-air TV stations and newspapers. Total revenue at GAC in 2005 is expected to be about 12 million dollars and it is expected to boost operating profits at Scripps networks by 5-10 million.

Washington Beat

NAB sees two routes
to minority ownership
The National Association of Broadcasters has responded to the FCC's request for comment on increasing the number of women and minorities within the ranks of broadcast ownership. It backs two proposals. The first is the reinstatement of a broadcast tax incentive program. Legislation to this effect has already been introduced in the Senate by John McCain (R-AZ). NAB recommends its adoption. The second is elimination or revision of the equity/debt attribution rule. NAB suggests that lack of capital is a major barrier to new broadcast owners, and that existing broadcasters would be a better source of start-up capital than are the general available sources of financing which lack an understanding of how the business works. However, broadcasters are often limited in this area - - if they reach 33% interest, whether it be voting or nonvoting stock, equity or debt - - the station counts toward its own caps. Even spin-offs are discouraged, since they essentially take the use of seller paper off the table. NAB says any loosening of the attribution rules will make it that much easier for existing broadcasters to help women and minorities into the business.

Engineering

iBiquity named 17th fastest-growing tech company in MD
iBiquity Digital announced it has been named the 17th fastest growing technology company in Maryland in Deloitte's annual Technology Fast 50 Program. Technology Fast 50 rankings are based on the percentage of growth in fiscal year revenues over five years, from 1999-2003. Bob Struble, iBiquity CEO, stated, "iBiquity is proud of this prestigious recognition. It reflects the tremendous long-term effort of our employees and our partners - AM/FM radio broadcasters, transmission equipment, semiconductor and radio manufacturers - in commercializing HD Radio technology. It also highlights the great momentum that HD Radio technology has established in the marketplace. With the recent announcements by Clear Channel, Cox and Entercom, three of the nation's largest radio broadcasters, to rapidly convert their stations to digital, 2,500 stations are now committed to HD Radio broadcasting." To qualify for the Technology Fast 50, companies must have had operating revenues of at least 50,000 in 1999 and 1,000,000 in 2003, must be public or private companies headquartered in North America, and be a "technology company" defined as owning proprietary technology that contributes to a significant portion of the company's operating revenues.

Transactions

WCAL-FM Minneapolis-St. Paul (Northfield MN) and KMSE-FM Rochester MN from Saint Olaf College to Minnesota Public Radio.

WGRP-AM Youngstown-Warren OH (Greenville PA) from Beacon Broadcasting Inc. to WGRP Radio Inc.

| More... |

Stock Talk

Radio stocks buck a down day
There was no news to account for it, but radio stocks did a bit better than the overall market on Tuesday - - posting small gains while the broader market was down slightly. A decline in oil prices brought blue chip stocks back from their lowest point of the day, so the Dow Industrials closed with a small loss of five points at 10,077.

But the Radio Index rose 1.010, or 0.5%, to close at 211.480. Radio One led the way with a gain of 2.1%. citadel rose 1.8%.

Radio Stocks

**Here's how stocks fared on Tuesday**
Company	Symbol	Close		Change	Company	Symbol	Close		Change
Arbitron	ARB		37.43	+0.30	Jeff-Pilot	JP		49.12	-0.18
Beasley	BBGI		15.00	+0.03	Journal Comm.	JRN		17.52	+0.14
Citadel	CDL		13.45	+0.23	Radio One, Cl. A	ROIA		14.26	+0.29
Clear Channel	CCU		31.43	+0.48	Radio One, Cl. D	ROIAK		14.13	+0.27
Cox Radio	CXR		14.42	+0.08	Regent	RGCI		5.50	-0.01
Cumulus	CMLS		14.00	-0.05	Saga Commun.	SGA		17.14	+0.13
Disney	DIS		24.84	-0.06	Salem Comm.	SALM		24.75	+0.15
Emmis	EMMS		18.27	-0.12	Sirius Sat. Radio	SIRI		3.75	+0.23
Entercom	ETM		32.23	+0.38	Spanish Bcg.	SBSA		10.22	-0.11
Entravision	EVC		7.52	-0.13	Univision	UVN		31.26	-0.50
Fisher	FSCI		47.98	+0.56	Viacom, Cl. A	VIA		34.94	-0.06
Gaylord	GET		31.12	-0.04	Viacom, Cl. B	VIAb		34.43	-0.03
Hearst-Argyle	HTV		25.09	+0.06	Westwood One	WON		20.90	+0.34
Interep	IREP		0.82	unch	XM Sat. Radio	XMSR		28.97	+0.36
International Bcg.	IBCS		0.01	unch	-	-	-	-	-

Bounceback

Send Us Your Opinions We want to
hear from you.
This is your column, so send your comments to [email protected]

Two readers had things to say about the Sinclair situation.

Gene S. -- Buffalo Wy.
& David Handler
| More... |

Upped & Tapped

Joe Hoffman named LSM at WKTI-FM
Joe Hoffman has been named Local Sales Manager at WKTI-FM Milwaukee. Prior to joining Journal's WKTI as an account manager in 1995, Hoffman worked as an account manager at WEZW-FM and WMYX-FM in Milwaukee.

More News Headlines

Chef Rocco joins WOR-AM

Phil Harper dead at 64

Clint O'Neil dead at 60

Entertainment industry asks high court for ruling on file sharing

Competing Media

TV biz looking soft
at Gannett
With the Olympics now a memory and political ad spending soon to wrap up, Gannett is warning that its core TV business isn't looking as good as expected for the balance of this year. After reporting Q3 TV revenues up 17.3%, CEO Doug McCorkindale told Wall Street analysts that political spending is picking up after an unexpected slowdown in August and September, but that the company's core non-political business is soft. Gannett's CFO later said that both November and December are pacing up only in the low single digits.

RBR observation: It's not just radio that's seeing sluggishness and constant changes in pacing trends. Up until now, the political boom has been masking some underlying softness in TV ad sales, but election day is not far off and those dollars will soon be history.

International

Viacom to buy out
Viva shareholders
Viacom is moving to make Germany's Viva Media AG a wholly-owned subsidiary. After buying 75.8% of the MTV competitor back in June (6/25/04 RBR Daily Epaper #124), Viacom has now boosted its stake to more than 95% after buying out most remaining shareholders in a tender offer. The company has now launched a formal "squeeze out" to force out the remaining few shareholders at the same 12.65 euros per share that the other shareholders were paid.

September Digital Solutions 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.

September Zinio Solutions Magazine
Read RBR in 2 simple steps:
1.Create a simple account with Zinio and download the free Zinio Reader.
2. You can then download the free September Issue of RBR

RBR Radar 2004

Click on these issues for Radio News you won't read any where else. RBR--First, Accurate, and Independently Owned.

Publisher Perspective--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. You can't say radio is a local medium and not be local. This is actually going to force the smart broadcaster-public or private to really invest in the beginning of future talent. You're going to have to coddle it, you're going to have to nurture it, you're going to have to embrace it, force-feed it and watch it grow. You're going to have to make a commitment into a local talent. Those type of talents have to be re-born again. And, 'We are going to buy back our stock.' Well why? 'It's very simple-because nobody else wants to buy it.' 10/12/04 RBR #199

Sinclair stirs up another
political hornet's nest
Planning to air an anti-John Kerry documentary called "Stolen Honor: Wounds That Never Heal" across its multi-market, multi-network station group before the election 11/2. The move, to say the least, is not popular among those supporting Kerry.
RBR observation: If Sinclair is doing anything, it is fueling the movement to revive the Fairness Doctrine, not to mention efforts to turn back the clock on broadcast ownership consolidation. 10/12/04 RBR #199

Indecency hike off.
No, on. No, off. No, on?
As key watchdogs urge their constituents to blanket Capitol Hill with virtual messages to keep 500K dollar fines for broadcast indecency alive, various senators are working to satisfy their demands. According to numerous reports, relatively unburdened, standalone legislation will have been introduced by the time you read this, fixing the maximum indecency fine at 500K dollars.
RBR observation: If a version of this bill, stripped of excess baggage, ever gets a vote, it'll enjoy an overwhelming bipartisan victory. It may or may not happen now. It may or not happen during a lame duck session. It may not happen until after the 109th Congress is seated. But it's going to happen.
10/12/04 RBR #199

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. RBR observation: 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. 10/11/04 RBR #198

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. 10/11/04 RBR #198

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.
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. 10/11/04 RBR #198

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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