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Volume 21, Issue 201, Jim Carnegie, Editor & Publisher
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Thursday Morning October 14th, 2004
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Radio News®
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 O'Reilly sues attorney, law firm
and Fox News employee for extortion
Bill O'Reilly, host of the Fox News Channel's The O'Reilly Factor and Westwood One's The Radio Factor, filed suit in Nassau County Supreme Court against a Manhattan attorney, his law firm, Morelli & Associates, and Fox News employee Andrea Mackris for allegedly attempting to extort 60 million dollars from him. Benedict Morelli and the Fox News employee threatened to sue O'Reilly and Fox News, claiming he allegedly engaged in offensive sexually harassing conversations with the employee. The employee worked for O'Reilly for four years before moving to CNN earlier this year. After five months at CNN, the employee asked O'Reilly to return to Fox News, and did so in July of this year. The complaint alleges Morelli and the employee engaged in an extortion attempt by threatening to file a well-publicized sexual harassment lawsuit and demanding an exorbitant financial settlement for hush money. The complaint describes how it was likely Mackris had taped O'Reilly without his knowledge and Morelli's demand that Mr. O'Reilly pay the pair "nothing less than 60 million." In addition, Morelli claimed he "wanted to punish not only O'Reilly, but Fox News." Said O'Reilly: "As a public figure, I have received many threats. But enough is enough...the threats stop now. I will not give in to extortion." While O'Reilly is seeking unspecified damages, he stated that he would donate 100% of the monetary damages to charity. In addition to the extortion suit, O'Reilly has also sued Morelli, his law firm, and the employee for intentional infliction of emotional distress and wrongful interference with contractual relations, alleging their accusations threatened to impair his reputation and standing with his employers and the public. Here's the complaint, courtesy of the Drudge Report. | More... |
Fox disagrees with fine
"We disagree with the FCC's decision and believe the content is not indecent." So says Fox Broadcasting of the nearly 1.2M dollar fine levied against 169 of its affiliates and O&Os (10/13/04 RBR Daily Epaper #200), according to the Associated Press. The subject of the fines was an episode of reality series "Married by America." Fox has a month to appeal the FCC's action. It has not said yet what it plans to do. Viacom, facing a series of fines going back to the Opie & Anthony Sex for Sam incident during the summer of 2003, has vowed not to pay and to go to court if given the opportunity. This is the first time Fox has been hit with such a fine. Meanwhile, the FCC's action was praised by the Parents Television Council. "The FCC is finally starting to listen to an outraged public," wrote PTC's Brent Bozell. "We applaud the FCC for holding all Fox affiliates responsible for airing the filthy and indecent broadcast. We've been demanding this for years and it's high time that every licensee is held accountable for their actions." He went on to ask that the issue be considered at license renewal time for each station involved.
 Sinclair fallout continues
A documentary producer has offered Sinclair free use of a pro-Kerry production to balance its airing of an attack piece. Sinclair advertisers are now posted on the web, and activists are getting instruction on how to use them as a pressure point. And another ex-Commissioner has weighed in on the topic.
RBR observation: Sorry Gloria, but you're as off-base today as you were when you served on the FCC. So what if Sinclair broadcasts a slanted documentary that bashes Sen. Kerry? So what if CBS airs a report bashing President Bush that turns out to be based on fake documents? There is no place in the country where a market has only one TV station (not to mention 100+ cable and satellite channels). People are free to choose what they want to watch or listen to - - and how much credence to give what they see or hear. It looks like Sinclair is going to pay a price in some lost ad revenues for its programming decision, just as CBS News has suffered a loss of some of its credibility. That's how the marketplace of ideas works. Rush Limbaugh spews forth three hours of biased broadcasting every day on radio - - and so does Al Franken. Can you imagine how dull and lifeless both shows would be if the misnamed Fairness Doctrine and personal attack rules were brought back to muzzle lively debate on America's airwaves?
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Blockbuster swap a blockbuster for Viacom
Viacom is celebrating success in its spin-off of Blockbuster Inc. to shareholders, with its stock-swap offer greatly oversubscribed (9/9/04 RBR Daily Epaper #176). As a result, the new Blockbuster shares are being distributed on a pro-rata basis, although people who submitted fewer than 100 Viacom shares for the swap will get a full allotment. Of the other Viacom Class A and B shares submitted, only a bit over 9.4% of the more than 292 million shares tendered have been accepted for exchange. In all, Viacom is exchanging 144 million Blockbuster shares (72 million each of Class A and Class B) for just under 28 million Viacom shares - - a ratio of 5.15 Blockbuster shares for each Viacom share. If you participated in the tender, your Blockbuster shares should show up in your brokerage account by October 20th.
Q4 looking double digits for NT Times broadcast
With few of its broadcast properties in major battleground states, the New York Times Company hasn't gotten quite the boost from political ad spending of some other TV groups. Still, Executive VP and COO  Janet Robinson told Wall Street analysts that Q4 is pacing ahead in the low double digits after a 9% boost in Q3. For September, the NY Times Co. said revenues for its eight TV and two radio stations were up 5.8% to 12.2 million, with political, automotive and furniture cited as strong categories.
 Campaign ad watch:
Battleground tightens
The University of Wisconsin Advertising Project and Neilsen Monitor-Plus have reported that the advertising war associated with George W. Bush v. John Kerry has tightened, with only 10 states remaining on the hot list. They are Colorado, Florida, Iowa, Michigan, Minnesota, New Mexico, Nevada, Ohio, Pennsylvania and Wisconsin. Looking at individual markets, Miami was a three-way winner. Both Bush and Kerry have it #1, so it easily was #1 overall as well. After that, the emphasis of the campaigns varied. The top ten markets overall from 9/24/04 through 10/7/04 are as follows: (1) Miami; (2) Albuquerque; (3) Reno; (4) Tampa; (5) Green Bay; (6) Cleveland; (7) Toledo; (8) Columbus OH; (9) Grand Rapids; and (10) Harrisburg. Seven of those markets make the top ten list of the Bush campaign. Funds are going to (1) Miami; (2) Cleveland; (3) Grand Rapids; (4) Reno; (5) Albuquerque; (6) Cincinnati (7) Madison; (8) Tampa; (9) Las Vegas; and (10) Green Bay. The Kerry campaign is heavy in only six of the markets on the overall list. It's top markets include (1) Miami; (2) Albuquerque; (3) Tampa; (4) Denver; (5) Green Bay; (6) Columbus OH; (7) Orlando; (8) Charleston WV; (9) Harrisburg; and (10) Quad Cities IA.
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| Confernce Calls Q3 2004 |
Higher costs cut profits at NY Times Co.
Q3 revenues were up 1.9% to 773.8 million dollars at the New York Times Company, but costs increased 3.4% and held net income to 48.3 million, a slight drop from 50.1 million a year ago. Earnings per share held steady at 33 cents - - beating the Thompson first Call consensus by a penny. Executive VP and COO Janet Robinson noted, however, that advertising revenues were up 3.7% for the quarter. Broadcast Media Group (8 TV and 2 radio stations) revenues rose 9% to 38 million and operating profits rose 23.9% to 9.2 million. After reporting that September ad revenues companywide were up 2%, the New York Times Company told Wall Street analysts that ad revenues for October are growing a bit faster than September.
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Adbiz©
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The Dolans, Forbes on 2,033 affiliates? How?
We checked it out for ourselves: Glenn Felty, True Measure CEO, is claiming on his website (www.truemeasure.net) that the Dolans, which WOR Radio Network fired, are now on 2,033 affiliates with 'The Dolans Money Minute" vignette. Affiliates include heavy-hitters such as KNX-AM, WBBM-AM, KYW-AM and WCBS-AM. Ironically, another product from True Measure, "Forbes FYI," is also on exactly 2,033 affiliates/99% coverage, according to the website. Those are some pretty lofty numbers and some pretty heavy affiliates (better than Paul Harvey, no doubt) first of all, and a bit hard to believe that that exact number of stations would clear both. The website/press release also mentions there is an opportunity for a single advertiser to get live reads embedded against the vignettes, including AM/PM drive. In a Less is More marketplace, this is hard to believe. We asked Felty how it's done: | More... |
TNS Media Impact study: Americans reference multiple media before making purchases
Advertisers can significantly extend their reach by distributing their messages among multiple mediums, according to the 2004 Media Impact Study, conducted by TNS, one of the world's leading market research providers. Study results show that, in particular, the Yellow Pages can bolster an advertiser's reach by 18 to 22% when used in conjunction with other media. The Media Impact Study identifies which media combinations produce the greatest reach for each of 155 product and service categories and measures the influence on consumers' purchasing habits of Direct Mail, Newspapers, Television, Online Services, Coupons, Magazines, Radio, Catalogs, the Yellow Pages and, for the first time, Internet Yellow Pages. | More... |
 Miller calls the shots In FX's "Save Me"
The Wall Street Journal reports on the product placement deal between Miller Brewing and FX's "Rescue Me." Excerpts: "The script for an episode of the ribald FX channel firefighter drama "Rescue Me" called for Jerry Reilly, the cable show's grumpy fire chief, to get into a fight at a gay bar. A character in the scene was to break a bottle of beer and brandish it as a weapon. But when Miller Brewing Co. balked at the idea of its product being used in the brawl, producers agreed to omit the brand from the scene, which was eventually canned anyway. | More... |
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| Media Markets & MoneyTM |
Salem enters Miami market
Salem Communications no longer has a hole to fill in the top 20 markets. The Religious radio specialist has cut a deal to acquire WKAT-AM Miami for 10 million dollars, giving it its first outlet in market #12. The seller is Classical 1360 LLC, headed by Christopher Korge.
Saga antes up in Charlottesville
Ed Christian is taking his company into a second Virginia market with a deal for an AM station and two FMs in Charlottesville. It'll complement the group's one-AM, two-FM cluster in Norfolk. The stations, coming from the Eure Communications, are News-Talk WINA-AM, Rock WWWV-FM and AC WQMZ-FM. The trio is in a market saturated with Clear Channel offerings - - its cluster is double the size of the Eure trio, with two AMs and four FMs - - but the Eure group is highly competitive nonetheless. All three stations are among the market's top six as measured by Arbitron. "We are proud to have been chosen to continue the outstanding broadcast tradition established by the Eure family with these stations in Charlottesville," said Christian. "We look forward to working with the existing staff to continue the great work that these stations have been doing in Charlottesville." The price of the deal was not immediately disclosed. Eure acquired WINA/WQMZ in 2000 for 3.15M dollars (RBR 7/3/00).
 Sirius completes stock & bond sale
Sirius Satellite Radio has another 321 million dollars in its coffers (enough to pay Howard Stern for more than three years). The company said it had closed an offering of 230 million in convertible notes due 2011 (paying 3.25% interest), with the remaining cash from an offering of 25 million shares of stock. The notes are convertible to Sirius stock at a conversion rate of five dollars, 30 cents per share.
The Sporting News for sale?
No one involved is talking, but the New York Post reports that Paul Allen's Vulcan Inc. has hired Allen & Co. to shop The Sporting News, which the Microsoft billionaire bought four years ago for 100 million dollars. Since then he also started a sports radio network and acquired a group of AM stations now branded with The Sporting News name, so those would presumably be included if there is any sale. According to the Post, about 26% of the company's 60 million dollars in annual revenues comes from its radio operation.
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| Washington Beat |
LUC amuck:
Farmer demands MO money charged to Bond
Did you know: If a candidate airs political advertising which mentions the opponent, and omits that little I-have-approved-this-message disclaimer, then broadcasters are no longer required to assess the lowest unit charge (LUC) for any subsequent advertising? In Missouri, that is allegedly the case for Sen. Kit Bond (R-MO). His opponent Nancy Farmer, however, is taking that a step further, saying that this provision of the Bipartisan Campaign Reform Act (BCRA) prevents a station from charging LUC. Her campaign informed KSHB-TV Kansas City that Bond "...is broadcasting an advertisement on your station that violates the BCRA." The letter to the station continues, "Based on this violation, Missourians for Kit Bond shall not be entitled to receive your station's LUC, according to 47 U.S.C. Sec. 315 (b) (2) (D). This rate change is effective for all broadcasts on your station from the date the advertisements in violation first aired to the end of this election cycle." The Missouri Broadcasters Association (MBA) is petitioning the Federal Election Commission for clarification on this one, via attorneys Gregg Skall and Michael Shacter of Womble Carlyle Sandridge & Rice (WCSR). The questions are these: "(1) Is a radio or television station permitted to offer the LUC to a candidate for office even though the candidate is not entitled to receive the LUC due to the candidate's failure to include the required BCRA Statement in a broadcast commercial?" and "(2) If the answer to Question 1 is 'No,' then what rate should a station charge non-qualifying candidates?" The Farmer campaign is threatening to complain to the FEC that failure to charge a higher rate to the Bond campaign would constitute an illegal campaign contribution. Due to the immediate nature of this question, WCSR has asked for an expedited advisory opinion from the FEC. Stay tuned.
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| Transactions |
WDOX-FM Atlantic City-Cape May (North Cape May NJ) from WJNN Inc. to WBES LLC.
WZXX-FM CP Lawrenceburg TN from Way-FM Media Group Inc. to Radio Assist Ministry Inc.
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| Stock Talk |
Dow drops below 10,000
Another rise in oil prices put a damper on stock trading Wednesday. The Dow Industrials fell 83 points, or 0.8%, to finish below the 10K mark at 9,994.
Somehow, radio stocks managed to creep up a bit. The Radio Index rose 0.233, or 0.1%, to 211.713. Nobody moved much. SBS was up 1.5% and Emmis 1.4%, while Regent fell 2.4%.
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| Radio Stocks |
Here's how stocks fared on Wednesday
| Company |
Symbol |
Close |
Change |
Company |
Symbol |
Close |
Change |
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Arbitron
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ARB
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37.08
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-0.35
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Jeff-Pilot
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JP
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48.93
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-0.19
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Beasley
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BBGI
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15.02
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+0.02
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Journal Comm.
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JRN
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17.00
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-0.52
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| Citadel |
CDL |
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13.56 |
+0.11 |
Radio One, Cl. A
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ROIA
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14.42
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+0.16
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Clear Channel
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CCU
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31.11
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-0.32
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Radio One, Cl. D
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ROIAK
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14.30
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+0.17
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Cox Radio
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CXR
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14.50
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+0.08
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Regent
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RGCI
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5.37
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-0.13
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Cumulus
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CMLS
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14.03
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+0.03
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Saga Commun.
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SGA
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17.00
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-0.14
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Disney
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DIS
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25.01
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+0.17
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Salem Comm.
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SALM
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24.68
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-0.07
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Emmis
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EMMS
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18.53
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+0.26
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Sirius Sat. Radio
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SIRI
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3.74
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-0.01
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| Entercom |
ETM
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32.50
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+0.27
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Spanish Bcg.
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SBSA
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10.37
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+0.15
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Entravision
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EVC
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7.50
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-0.02
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Univision
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UVN
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31.18
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-0.08
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Fisher
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FSCI
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47.20
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-0.78
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Viacom, Cl. A
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VIA
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34.85
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-0.09
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Gaylord
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GET
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31.13
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+0.01
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Viacom, Cl. B
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VIAb
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34.33
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-0.10
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Hearst-Argyle
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HTV
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25.21
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+0.12
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Westwood One
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WON
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21.06
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+0.16
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Interep
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IREP
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0.80
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-0.02
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XM Sat. Radio
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XMSR
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29.52
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+0.55
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International Bcg.
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IBCS
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0.02
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+0.01
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-
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-
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- |
-
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-
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Bounceback
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 We want to
hear from you.
This is your column, so send your comments to [email protected]
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Upped & Tapped
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Moonves to WW1 board
Viacom Co-President/COO Les Moonves has been elected to the board of directors of Westwood One, the nation's largest radio network and traffic reporting company. Viacom is a major shareholder of Westwood One and Mel Karmazin had resigned from its board after leaving Viacom.
Jenkins to ACR
Former on-air talent and media trainer Vickie Jenkins has joined All Comedy Radio as affiliate marketing specialist.
Will Kelly play
in Peoria?
Veteran morning man Tom Kelly has taken his act from Las Vegas to Peoria and is now appearing on AAA Entertainment's WXCL-FM, along with co-host Kimber Bennett. Dan Dermody moves to middays.
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International
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NBA & Disney
To Promote Reading
In China
As part of the historic NBA China Games 2004, the National Basketball Association (NBA), DisneyHand, the worldwide outreach for The Walt Disney Company, and Hong Kong Disneyland will work together to help promote literacy and the importance of reading in Shanghai and Beijing. The NBA's Read to Achieve program and DisneyHand's Reading Together initiative have teamed up to host Read to Achieve events at primary schools in Shanghai and Beijing during the NBA China Games 2004. As part of the collaboration, Disney Publishing Worldwide, the world's largest publisher of children's books and magazines, will donate 1,000 books to each school.
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September Digital Solutions Magazine
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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.
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
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RBR Radar 2004
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Click on these issues for Radio News you won't read any where else. RBR--First, Accurate, and Independently Owned.
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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 is over 1 million bucks. RBR observation: Why did the FCC fine all stations this time, after fining only Viacom/CBS O&Os? Our 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.
10/13/04 RBR #200
Two more Wall Street
analysts weighed in
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.
10/13/04 RBR #200
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. RBR observation: Our advice to Mr. McCorkindale is to get in big or don't get in at all. 10/13/04 RBR #200
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. RBR observation: This is no surprise to folks on the front lines selling TV advertising. 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. 10/13/04 RBR #200
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
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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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©2004 Radio Business Report/Television Business Report, Inc. All rights reserved.
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