Welcome to RBR's Daily Epaper
Volume 21, Issue 202, Jim Carnegie, Editor & Publisher
Friday Morning October 15th, 2004

Radio News®

Marsh sees still lower radio stocks
"While radio stocks bump around near 52-week lows, we still see downside for the average radio stock from here, especially as we near 2006," was the dire warning from S.G. Cowen analyst James Marsh in his latest missive to investors. And he's not just a short-term bear. Marsh sees radio revenue growth in the 2-3% range over the next five years - - a far cry from a return to the historical 7-8% range that broadcasters hope to get back to after crawling out of this prolonged ad recession.

RBR observation: Could it happen? You bet. It's because radio has been turned into a commodity and left itself open to attack. It's not going to be easy or cheap to get radio programming, management, sales and marketing back on track - - but it has to be done.
| More... |

O'Reilly producer's suit made public
The day after Fox News Channel/Westwood One's Bill O'Reilly made his suit against former associate producer Andrea Mackris public (10/14 RBR Daily Epaper #201), she has released her suit against him and Fox News for sexual harassment. Mackris alleges her boss had phone sex with her "against her wishes" three times. Fox also filed a countersuit, saying the complaint was a politically motivated extortion attempt. During a phone conversation this August, Mackris, 33, said O'Reilly suggested she buy a vibrator and was clearly excited. Before hanging up, she said, O'Reilly told her: "I appreciate the fun phone call." She contended he made a similar call 9/21, ending that one by saying: "Next time you'll come up to my hotel room and we'll make this happen." O'Reilly's lawyer, Ronald Green, said he believes there are tapes of conversations between the two and asked a court to compel Mackris to produce them so they could be played publicly. "I know that he does not fear what is on the tapes," Green said. Morelli would not comment to the AP on whether any taped phone conversations exist. On his show Wednesday, O'Reilly called the case "the single most evil thing I have ever experienced, and I've seen a lot. But these people picked the wrong guy."

FCC stays out of Sinclair case
Despite protests from nearly 50 members of Congress, FCC Chairman Michael Powell has declined to intervene in Sinclair Broadcast Group's plans to air an anti-Kerry documentary over 62 of its O&O television stations. His reason is simple: He doesn't have the power to do so. Powell told reporters, "Don't look to us to block the airing of a program. I don't know of any precedent in which the Commission could do that," according to the Associated Press. Powell noted First Amendment problems with such an action, and said that a formal complaint probably wasn't even possible until the program actually airs.

RBR observation: Powell is correct. You can say "there oughtta be a law" all you want, but if there isn't a law, there is nothing that our elected or non-elected officials can do. And Powell is again correct - - you can't give someone a ticket for speeding in advance just because you're pretty sure they're going to speed. Exactly what damage is Sinclair doing? It's doubtful it's hurting Kerry very much. In fact, it may well be doing the opposite. And the number of people who would tune in is questionable, anyway. They're saying Sinclair reaches 24% of all TV households. If "Stolen Honor: Wounds That Never Heal" pulls a 100-share, that'd be pretty impressive. It isn't going to pull a 100-share. There are early indications that grass-roots efforts are having at least some success getting advertisers to abandon Sinclair stations. The biggest problem with this whole mess, however, is that it is occurring at a time when broadcasters have already been kicked from one end of Capitol Hill to the other regularly for over two solid years - - and let's not forget added contributions from the court system. Sinclair, if nothing else, is galvanizing opposition to the industry - - opposition which didn't really need any further motivation. We hope it's all worth it to Sinclair, because the entire industry may pay.


Sinclair howls continue
18 US senators sent a letter to FCC Chairman Michael Powell urging him to look into the Sinclair "Stolen Honor: Wounds That Never Heal" controversy. They have now been joined by 30 members of the House, who sense no less than the scent of the old USSR and Red China. Also, Sinclair advertisers are taking heat. | More... |

Scripps sees soft TV ad market
After outperforming other media stocks for much of this year, E.W. Scripps Company took a hit on Wall Street yesterday after missing expectations for Q3 - - with income per share of 34 cents, instead of the expected 37 cents. More importantly, the company said Q4 earnings are expected to be 50-55 cents, a nickel below the Thompson First Call consensus of 60 cents. Ad revenue growth for the company's biggest growth engine, its cable networks unit, is expected to drop to 25% from 33% in Q3. TV revenues are expected to be up 13%. That's a bit better than the 12% growth in Q3, but mainly due to political spending - - and Scripps Television President Bill Peterson warned analysts that the ad market is looking soft once election day passes. In all, Scripps is expecting its TV group to book about 35 million dollars in political ad revenue this year, which is about the same as four years ago. As for post-election business, Peterson said both November and December are pacing up in the low single digits.

RBR observation: Gannett CEO Doug McCorkindale just two days ago, 10/13/04 RBR #200, was seeing the same as Scripps by saying the company's core non-political business is soft and that both November and December are pacing up only in the low single digits. Now Scripps seeing both November and December pacing up but in the low single digits. Television may just start to be feeling that breeze from Naples, FL

Vandal scandal?
Houston: We have a problem
According to consulting engineer Garrison C. Cavell of Cavell, Mertz & Davis Inc., broadcasters in the Houston area have suffered a rash of transmitter break-ins. At least 13 radio station transmitters and a pair of television stations have been hit. The local chapter of the SBE has called in the local sheriffs, as well as the FBI, to look into the problem. Some of the break-ins, according to email communications provided by Cavell, have had the mark of random vandalism. Others, however, appear to be done by knowledgeable individuals - - tower lights have been turned off and other breakers have been tripped, equipment has been stolen, and in one case a generator's diesel tank was emptied by slashing a fuel line. Bolt cutters and pry bars have been used to gain entry, and in other instances, the criminals involved have come through the roof.

RBR observation: The FCC and the Homeland Security Department has organized a high profile task force to ensure that the broadcast infrastructure remains intact in the event of an emergency, whether it be natural or manmade. But is it going any good? As far as we know, Houston is disaster-free at the moment, and the fact that shady elements of society, for whatever reason, are able to attack so many stations with impunity is troubling, to say the least. If they can do it, what's to stop people with a more sinister agenda? This should serve as a wake-up call to Congress, the FCC and every broadcaster in the US.


Conference Calls Q3 2004
Scripps disappoints The Street
Q3 net income was up 7.2% at the E.W. Scripps Company to 55.6 million dollars, or 34 cents per share. But that was well below the 37 cents that was expected by Wall Street. Scripps said hurricane-related business losses from its Florida newspapers and TV stations accounted for about 3.7 million of the shortfall, or two cents per share. Broadcast TV revenues were up 12% to 80.7 million and profits rose 23% to 23 million. The company said national spot was up 1.3% and local down 2.7%. Political revenues were 10.2 million, compared to only one million a year ago. Ad revenues for the fast-growing Scripps Networks division were up 33% to 128 million - - with CEO Ken Lowe praising Home & Garten TV and Food Network for "spectacular performance" - - and affiliate fees grew 58% to 37.1 million. Newspaper ad revenues rose 2.5% to 131 million, with local up 0.8%, national up 3%, classified up 1.4% and preprint/other up 6.3%.


Adbiz©

Gunfight at the '04 corral
The battle over the Second Amendment and related firearms issues is being waged by proxies for George W. Bush and John Kerry. Bush has the NRA, Kerry the Brady Campaign to Prevent Gun Violence - - and they're all buying ads. The NRA has endorsed Bush, and has spent 1M to date to forward its issues. According to the Associated Press, it has another 19M to spend on broadcast and print advertising, phone banks, door-to-door efforts and direct mail. The Brady Campaign, on the other hand, says nothing about supporting Kerry. It says it's working on behalf of America's police officers. But its attack is focused squarely on Bush, however, in particular his failure to push for reauthorization of the assault weapon ban. It is buying ad time in battleground states.

Dr Pepper rolls out soda fountain classics
Dr Pepper announced the introduction of Cherry Vanilla Dr Pepper and Diet Cherry Vanilla Dr Pepper in its heartland markets, with a national roll out planned for January. Reminiscent of favorite fountain drinks from the 1950s, Cherry Vanilla Dr Pepper is the first offering in the company's new Fountain Classics line. Cherry Vanilla Dr Pepper and Diet Cherry Vanilla Dr Pepper combine the taste of Dr Pepper with a splash of cherry and a hint of vanilla. New Fountain Classics flavors will be introduced based on consumer feedback and tastes. Advertising support for the launch includes a television spot, 30- and 60-second radio spots, and two outdoor executions. The campaign is heavily focused on product imagery, with an emphasis on playfulness and fun, and features the tagline "Tastes so good you get lost in it." Ella Fitzgerald's "Dream a Little Dream" provides the soundtrack in the television ad, and the two radio spots are humorous parodies with the product at center stage. Outdoor includes separate executions for regular and diet flavors. Promotional efforts in 26 markets will feature hundreds of roller skating carhops passing out samples wherever consumers are found.

Cox Communications and John Walsh
debut Take Charge! PSAs
Giving parents simple, easy-to-use resources for managing what their kids see, and don't see, on TV programs and web sites, Cox Communications debuted PSAs for Take Charge! Smart Choices for Your Cox Digital Home. Launched in partnership with John Walsh, children's advocate and host of America's Most Wanted, the Take Charge! program hopes to increase awareness and use of the parental controls and filtering tools for TV and Internet services that are already available in most homes. Featuring Walsh, the five PSAs send the message that parents don't need to go overboard in controlling their family's mass media exposure. Highlighting parental concerns about monitoring their kids' online and TV access, the first PSA shows parents literally taking their TV sets and computers out of their homes each day. In all of the PSAs, Walsh explains how Take Charge! provides the easy tools and resources to help parents manage their children's access to TV and online content and to find good programming families can enjoy together. All five PSAs will be introduced this fall and will be aired on multiple cable channels in Cox markets nationwide.

Mustang Ads feature late Steve McQueen
The late Steve McQueen is making a return appearance starting next month in commercials for the 2005 Mustang, according to the AP. The ads draw on the actor's appearance behind the wheel of a Mustang in the 1968 action movie "Bullitt." Marketing experts say the ads are right on target because of the mystique surrounding McQueen, who died of cancer in 1980. The ad is an homage to the 1989 movie "Field of Dreams," in which Kevin Costner portrays a dreamer who conjures the spirits of Shoeless Joe Jackson and other baseball players when he builds a playing field on his farm. In Ford's commercial, a farmer builds a winding racetrack, which he circles in the 2005 Mustang, due in showrooms next month. Out of the cornfield comes McQueen. The farmer then tosses his keys to McQueen, whose likeness is created by a body double and some digital editing wizardry. The spot ends with McQueen driving off in the new Mustang. Mustang enthusiasts have been buzzing for days on Internet chat rooms about the high-concept commercial. Ford confirmed the accuracy of the story line described on the Internet, The Detroit News said. Marketing experts say the Ford ad is pushing the right buttons because the McQueen legend and the Mustang evoke fond memories for movie-goers and car buffs alike. The spot was conceived by J. Walter Thompson Detroit and shot by Believe Media.


Media Markets & MoneyTM
McCord accord: Where there's smoke, there's Feuer
The name JMJ Broadcasting Company probably won't ring many bells, but for broadcast anthropologists, the names Herb McCord and Norm Feuer will. The duo, associated with venerable radio relics Granum Communications and Triathlon Broadcasting, have teamed up to acquire their second radio station. The Golden Oldies group is entering the Topeka KS market via a 5.7M dollar deal for Country KTPK-FM. Brian Pryor of Media Venture Partners told RBR that MVP's client, seller Berl Brechner's Kansas Capital Broadcasting, had opted to exit the radio business, but will remain in the market with an ABC TV affiliate, KTKA-TV. It holds another TV in Salisbury MD. Both of these once and future group heads were among the sellers in the great Telecom 1996 station sell-off. McCord's Granum folded into Infinity in 1996, while most of Triathlon went to Clear Channel in 1998. They re-entered the radio business as partners in 2002 with the 3M dollar acquisition of what is now Classic Hits KXGL-FM in Amarillo TX.

RBR observation: We toyed with the idea of listing this story under the heading RBR FOSSIL WATCH. Before you send us emails of protest, we state: It's a joke - - get off our backs, already. We mean this in the best way possible, anyway. A quick glance at the latest Arbitrons indicates that while KXGL is going gangbusters, KTPK is in a bit of a turnaround situation. Let's see if these venerable virtuoso visionary veterans can teach some of the newcomers to radio a thing or two about station operations.

Colorado noncom doubles in Denver market
Boulder Community Broadcast Association (BCBA) already has an FM in Boulder in the Denver-Boulder Radio Market. Now it is going to establish a base in the big part of the market with a deal to take a commercial AM into the noncom world. Andres Neidig's Jo-Mor Communications is the seller, and the item to be sold is KGNU-AM (former KJME). Satterfield & Perry's Al Perry represented Neidig, helping him cut a 4.1M dollar deal, 3.1M of which will be paid pursuant to a promissory note. This is a backyard deal for Marc Hand's Public Radio Capital, which represented the buyer. BCBA already has KGNU-FM in Boulder, an NPR outlet. An LMA began 8/29/04. The group's programming is also heard in Ward and Ft. Collins.


Washington Beat
The Deal looking for waiver battle
Companies which have newspapers and television stations in the same local market, and lack a permanent waiver, probably thought they were home free on 6/2/03, when the FCC issued new rules making it much easier to put together a cross-media cluster. However, the 3rd Circuit took that victory away, at least temporarily, when it froze the rules and then remanded them back to the agency for further consideration. Waivers for companies, in particular News Corp., Tribune and Media General, have or are about to expire. But the FCC is not ready to try again with a new set of rules. So the question is, should the waivers be extended or should properties be divested? The FCC has not tipped its hand on this. An article in The Deal predicts that, whatever the FCC decides, it won't go uncontested. The companies involved will certainly try to keep their stuff, while consumers organizations are expected to try and prevent that eventuality. And that's not even to mention the growing horde on Capitol Hill that is taking a personal interest in all issues broadcasting. Get ready for another interesting year in Washington.


Programming
Radio America launches
Michael Reagan weekend edition

Radio America is proud to announce a special Weekend Edition of The
Michael Reagan Show. Debuting 10/16, this 2 hour program will air 8:00 - 10:00 AM EST. The Weekend Edition is a topical, fresh perspective from Reagan's daily broadcast and is tailored to be aired live or delayed later in the weekend. Reagan is currently on a cross-country tour broadcasting from many of his 160 stations while promoting his new book, Twice Adopted. The Michael Reagan Show is nationally syndicated and airs live Monday - Friday from 6:00 - 9:00 PM and on Saturdays from 8:00 - 10:00 AM EST.


Transactions
KBET-AM Las Vegas (Winchester NV); KFIF-AM Honolulu (Pearl City HI); KPTO-AM Idaho Falls-Pocatello (Pocatello ID); KACE-AM Tremonton UT; KNFL-AM Fillmore UT; and KENT-AM Parowan UT. 10.5% of Seller Diamond Broadcasting Corporation from Lavon Randall et al under various licensee names to Legacy Communications Corp.

WABG-AM Greenwood MS from Greenwood Broadcasting Company INc. to T.L. James Communications Inc.

| More... |


Stock Talk
Stocks slip on oil slick
Stock prices plunged on Thursday, done in by another record high for oil prices - - not to mention a disappointing outlook from General Motors. Broadcast stocks were further hurt by a soft earnings report from Scripps and an SG Cowen report downgrading radio stock expectations for the next five years. The Dow Industrials took a 108 point dive, or 1.1%, to 9,894.

The Radio Index was off 2.178, or 1%, to 209.535 (not quite a YTD low, but very close). Cumulus led the retreat, falling 3.2%. Radio One fell 2.7% and Entercom was off 2.6%.


Radio Stocks

Here's how stocks fared on Thursday

Company Symbol Close Change Company Symbol Close Change

Arbitron

ARB

36.80

-0.28

Jeff-Pilot

JP

48.01

-0.92

Beasley

BBGI

15.08

+0.06

Journal Comm.

JRN

16.61

-0.39

Citadel CDL
13.62 +0.06

Radio One, Cl. A

ROIA

14.02

-0.40

Clear Channel

CCU

31.00

-0.11

Radio One, Cl. D

ROIAK

13.92

-0.38

Cox Radio

CXR

14.15

-0.35

Regent

RGCI

5.49

+0.12

Cumulus

CMLS

13.58

-0.45

Saga Commun.

SGA

16.89

-0.11

Disney

DIS

24.85

-0.16

Salem Comm.

SALM

24.49

-0.19

Emmis

EMMS

18.15

-0.38

Sirius Sat. Radio

SIRI

3.65

-0.09

Entercom

ETM

31.67

-0.83

Spanish Bcg.

SBSA

10.33

-0.04

Entravision

EVC

7.43

-0.07

Univision

UVN

30.69

-0.49

Fisher

FSCI

47.25

+0.05

Viacom, Cl. A

VIA

34.22

-0.63

Gaylord

GET

31.10

-0.03

Viacom, Cl. B

VIAb

33.72

-0.61

Hearst-Argyle

HTV

24.77

-0.44

Westwood One

WON

20.71

-0.36

Interep

IREP

0.82

+0.02

XM Sat. Radio

XMSR

29.42

-0.10

International Bcg.

IBCS

0.02

unch

-

-

-

-

-

Bounceback

Send Us Your OpinionsWe want to
hear from you.

This is your column, so send your comments to [email protected]

These readers want the government to stay out of programming decisions. | More... |


Upped & Tapped

McGuire heads to
Baton Rouge
Veteran Country programmer Sam McGuire has been named Program director of Clear Channel's WYNK-FM Baton Rouge, LA.

Viacom adds a
board member
A Silicon Valley heavy-hitter, Oracle President Charles Phillips Jr., has joined the board of directors at Viacom, filling the seat vacated by the death of David McLaughlin.


More News Headlines

Competing Media

Final debate drew strong TV numbers
Nielsen Media Research reports that the third and final debate of this year's presidential race drew 51.2 million viewers to commercial broadcast and cable networks, beating the 46.7 million tally for debate #2, but still behind the 62.5 million who watched the first Bush-Kerry talkfest. For history buffs, click here for a look at how presidential debates have fared on TV since 1960.
| More... |


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.

Bill O'Reilly sues attorney, law firm and Fox News employee for extortion
All over the place, 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.
RBR observation: So it goes with the lifestyle of the rich and famous. 10/14/04 RBR #201

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.
10/14/04 RBR #201

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

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


Visit MediaHeadHunters.com
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.
Find Your Radio Career

Post Your Companies Job Openings


Other Links
©2004 Radio Business Report/Television Business Report, Inc. All rights reserved.
Radio Business Report -- 2050 Old Bridge Road, Suite B-01, Lake Ridge, VA 22192 -- Phone: 703-492-8191