RBR's Daily Morning Epaper

Volume 21, Issue 203, Jim Carnegie, Editor & Publisher

Monday Morning October 18th, 2004

Radio News®

Entercom gets
55K indecency fine
KRXQ-FM has been hit with a double indecency fine of 55K dollars, directed at its Rocker KRXQ-FM in Sacramento. There are two maximum 27.5K fines leveled at the "Rob, Arnie and Dawn in the Morning Show," one for a program aired 9/13/02 and another for a show on 1/17/03. The programs were brought to the attention of the FCC by a lone persistent complainant, who accompanied "...a series of written complaints..." with tapes and transcripts.

RBR observation: Example of what KRXQ did - Arnie, speaking as a little boy, said, "Daddy's going to take me to a restaurant 'cause he wants to take pictures of me in my birthday suit"... We will stop there but see more details inside. | More... |

Boyle pegs Saga Charlottesville buy at $22M
Wachovia Capital Markets James Boyle has weighed in on the Saga/Eure deal in Charlottesville VA (10/14/04 RBR Daily Epaper #201), in which Ed Christian's group picked up a high-powered one-AM, two-FM duop in competition with a big Clear Channel cluster. Boyle says that even at 22M dollars, this looks like a great buy for Sage, even though the market is relatively small. He likes the town's growth as a bedroom community, its big university, and the fact that Saga got the stations at a bargain by precluding an auction, which Boyle feels would have certainly jacked up the price.

Media General to appeal
crossownership to Supreme Court
With license renewals for several of its television stations hanging in the balance, Media General is preparing to ask the US Supreme Court to overturn the Philadelphia Federal Appeals Court ruling which blocked the FCC's new ownership rules from taking effect. "As we've said before, we do not think the Third Circuit's decision this past summer on crossownership serves the American public and we do not believe it provides practical guidance for our industry," said Media General Chairman and CEO J. Stewart Bryan III in his quarterly Wall Street Conference call. He said the company will file a petition on December 2nd seeking a US Supreme Court review of the lower court's decision. "We think this will be an historic opportunity for the Court and we're hopeful that it will take the case and provide some necessary direction for the lower courts and the FCC." In the meantime, Media General is proceeding to seek license renewals for its TV stations which have temporary waivers of the crossownership rule. Renewal applications have already been filed for WBTW-TV Florence, SC and WMBB-TV Panama City, FL. Bryan said Media General submitted evidence of the "compelling public interest benefits of convergence" in seeking permission to continue operating those TV stations in markets where it also owns a daily newspaper. Similar filings are planned for WRBL-TV Columbus, GA and WJHL-TV Johnson City, TN when their licenses come up for renewal. "We are optimistic that waivers will be granted in all of these markets," Bryan insisted. Media General's largest crossownership market is Tampa-St. Pete, but that combination of WFLA-TV and the Tampa Tribune existed before the crossownership rule went into effect and is grandfathered so long as both are owned by Media General.

Kerry campaign takes its case to Sinclair
Marc E. Elias, General Counsel for the campaign of John Kerry, has fired off a letter to Sinclair Broadcast Group President/CEO David Smith, with a cc directed to the FCC, questioning the legality of Sinclair's planned broadcast of "Stolen Honor: Wounds That Never Heal." As a remedy, should the group go ahead with the broadcast, Elias requests equal time and audience potential in which to air a documentary of the Kerry campaign's choosing.

RBR observation: We doubt that the Kerry campaign is going to get anywhere with its protests to the FCC and FEC, but it is, at the very least, making some political hay by keeping this issue in the news. We may not agree with Sinclair's editorial judgment (we wouldn't air this propaganda film or Michael Moore's if we were a station licensee), but it has the right to make that decision - - without government interference. | More... |

Pay-per-view channel nixes Fahrenheit 9/11
While the Kerry campaign battle with Sinclair over plans to air and anti-Kerry documentary, it appears that Michael Moore's Bush-bashing documentary, "Farenheit 9/11," won't even get a pay-per-view airing on TV before the November 2nd election. iN Demand announced Friday that it wouldn't air the film due to "legitimate business and legal concerns. Meanwhile, Moore has offered to lwt Sinclair air his film on its 62 stations to counter-balance "Stolen Honor: Wounds That Never Heal," although it's not clear that he could make good on that offer in the unlikely event that Sinclair accepts. Moore had previously failed to get his business partners to agree to let "Fahrenheit 9/11" air on free broadcast TV before the election. The low-budget film is the highest-grossing documentary of all time, having earned more than100 million dollars so far - - and while Moore is intent on toppling President Bush, his business partners still want to make more money.

Conference Calls Q3 2004

Media General sees strong Q4 - - but then what?
Media General reported strong results for Q3 and promised more of the same for Q4 - - but executives warned Wall Street that things look murky beyond election day. Q3 earnings were 15.7 million dollars, or 66 cents per share, beating the Thompson First Call consensus by a penny. TV revenues were up 9.1% to 77.3 million, with ad sales up 11.6% to 8.1 million. Of course, a lot of that was due to political spending, with local ad sales up 3.3% and national 2.6%. Q3 would have been even better, but for hurricanes, which the company said cost it 2-2.5 million in profits from its Florida and Alabama newspapers and TV stations. With political spending still hot, TV ad revenues are expected to be up 15% in Q4, but Chairman and CEO

J. Stewart Bryan III also sounded a cautious note. Asked by an analyst about current pacings, President and COO Reid Ashe replied that "inventory is a special problem this month." He noted that political spending is very targeted this year, so it is coming in most heavily in only a few markets. Unfortunately, those tend to be the same markets which were hit by hurricanes and where local merchants are now trying to buy advertising to get back to normal business - - so there is an imbalance between demand and available inventory.

Adbiz©

AARP names TRUE AOR for African-American push
AARP announced it has named the TRUE Agency as its AOR for an initiative designed to expand outreach to people of color and grow its African American membership following a competitive review conducted by search consultancy MatchWorks. AARP aims to increase membership acquisition and retention of African American members; maintain a consistent presence in African American 50+ communities; increase awareness of AARP and its benefits within the 50+ African American community; and increase satisfaction and engagement of African American employees and volunteers. TRUE will be responsible for developing a fully integrated marketing and communications platform under the AARP tag: "The power to make it better." TRUE's assignment includes print, radio, local newspaper and events production, as well as media planning and buying.

Toys R Us taps Mediaedge:cia
Mediaedge:cia NY has reportedly scored the 130 million Toys R Us general and Hispanic media planning and buying account after a review. Starcom and Tapestry Chicago were the incumbents. In May Y&R won creative after a review.

Nestle consolidates planning and buying
Swiss food group Nestle has announced that it has decided to consolidate its entire media planning and buying with Publicis Groupe (ZenithOptimedia) and WPP (Group M). Nestle said it made the decision after a review of its media operations across its top media markets. The review involved media investment in all Nestle brands, categories and Nestle companies, as well as joint venture partner Cereal Partners Worldwide Nestle Japan, however, will continue its longstanding media relationship with Dentsu.

Media Markets & MoneyTM

Salem says what's in Astoria for Portland
Salem Communications Corp. has acted on a two-year-old purchase option to get its third FM and fourth station in the Portland OR market. KAST-FM is riding a technical upgrade to take its Astoria OR signal into Portland airspace. The seller is New Northwest Broadcasters LLC, which basically gets 8M dollars for the station. Salem also paid one dollar for the option and provided another 100K for upgrades and, in the case of McKenzie River Broadcasting, a downgrade. The option agreement dates back to 7/29/02. KAST-FM will join KFIS-FM and KPDQ AM & FM, taking the Religious specialist up to superduopoly status in the market.

Kirkman gets a quartet as Citadel unspools
The eight-station superduop run by Citadel in the Charleston SC market is about to contract a bit, going from three to two AMs in complement to its full-bore five-FM contingent. Meanwhile, Kirkman Broadcasting gets its fourth entrant on the senior band. In fact, Kirkman will have a foursome on its hands which mirrors the use of AM - - when it adds Standards WTMZ to its collection, it'll be filling out a cluster which already has a New station, a Talk station and a Sports station, according to the BIAfn Radio Yearbook 2004. Kirkman is paying $500K cash for the station, and will also kick in another $200K to Citadel for consulting services.

Washington Beat

More fine times at the FCC
The regulatory enforcement cops at the FCC have had their ticket books out. Here's the latest crop of citations:
* 20K to Victory & Power Ministries, WPFC-AM Baton Rouge, for EAS, antenna fencing and public file miscues.
* 4K to Saga's WLZX-FM Northampton MA (Springfield MA market) for a telephone prank against crosstown Pamal's WRNX-FM which was executed without prior notice.
* 4K to Capital Media Corp., with stations in Troy, Lake Luzerne, Schoharie NY and Rupert VT, on EAS failings.

NAB gets DTV ink in WSJ
The Friday 10/15/04 edition of the Wall Street Journal was graced by the words of National Association of Broadcasters President/CEO Eddie Fritts, who took issue with a 9/27/04 article by Lee Gomes attacking blockage of the so-called Ferree plan for DTV conversion put forth by John McCain in the Senate Commerce Committee. Fritts' response received the headline "Don't Leave Millions of TV Viewers Stranded."

Here's what he wrote: "In his Sept. 27 'Portals' column on the digital television transition 'Broadcasting Lobby, Exercising Its Clout, Hangs On to Spectrum,' Lee Gomes misses the central point of an orderly DTV transition, which is to protect millions of Americans from losing access to local TV stations that are free of charge to consumers." "There are 73 million television sets in use in America connected neither to cable nor satellite, 45 million of which are in homes that rely exclusively on local, 'over-the-air' stations as their sole source of television. These stations provide more than just entertainment; as hurricane-ravaged Florida residents can attest, they provide lifesaving information to communities in crisis." "Department of Homeland Security Secretary Tom Ridge recently acknowledged the invaluable role played by local broadcasters when he said that 'local citizens know they can rely on radio and television stations as a lifeline service in the event of terrorist acts, tornado alerts and natural disasters.'" "Broadcasters are doing their part to bring the next generation of TV to American homes. We are committed to completing the digital transition, and we stand ready to work with policy makers in support of a compromise that doesn't disenfranchise millions of consumers who could be left stranded by a premature end to analog television." Edward O. Fritts, NAB

RBR observation: Bravo Eddie you are correct. Just ask the thousands in Florida that were with out electric during the past four hurricanes and only received their information via local radio, which in many cases were taking the audio feed from a local television station. Those with battery powered TV sets, not cable or satellite attached, relied upon that little piece of metal called an antenna for reception on those little sets and in Black and White. TVBR staffers in Florida know the value of our media and what Eddie Fritts wrote. You go Big Daug.

Monday Morning Makers & Shakers

Deals: 9/6/04-9/10/04
There were only seven deals - - six really - - but only one was for a standalone (and that was a CP). Border's acquisition of 15 stations and turnarund spinback of eight of them accounted for almost all the action in the last week before deal freeze #3.

9/6/04-9/10/04	Total
Total Deals	7
AMs	8
FMs	24
TVs	0
Value	98,271,000

| Complete Charts |

Radio Deal of the Week
Blockbuster by Border
| More... |

TV Deal of the Week
No TV deals this week

Transactions

KYXE-AM, KZTS-AM, KZTA-FM Yakima (Selah, Sunnyside, Naches WA); KZTB-FM Tri-Cities WA (Benton City WA); KZML-FM, KULE AM & FM Moses Lake-Ephrata-Quincy (Quincy, Ephrata WA); and KZZM-FM Weston OR from Butterfield Broadcasting Corporation to Bustos Media of Washington LLC.

WTRB-AM Ripley TN from Williams Communications Inc. to West Tennessee Regional Broadcasting Inc.

| More... |

Stock Talk

Retail sales help stocks
A stronger than expected report on retail sales gave stock prices a boost on Friday. The Dow Industrials rose 39 points, or 0.4%, but still closed below the 10K mark at 9,933.

Of course, good news for retailers is good news for broadcasters, although radio stocks barely inched upward. The Radio Index rose 0.045, or 0.02%, to 209.580. Saga and Entravision were the best performers, up 1% each, while Emmis trailed the pack with a loss of 1.1%. Although not an index component, Viacom's Class A rose 1.1% and Class B 1%.

Radio Stocks

**Here's how stocks fared on Friday**
Company	Symbol	Close		Change	Company	Symbol	Close		Change
Arbitron	ARB		36.92	+0.12	Jeff-Pilot	JP		48.37	+0.36
Beasley	BBGI		15.02	-0.06	Journal Comm.	JRN		16.66	+0.05
Citadel	CDL		13.65	+0.03	Radio One, Cl. A	ROIA		13.98	-0.04
Clear Channel	CCU		31.02	+0.02	Radio One, Cl. D	ROIAK		13.83	-0.09
Cox Radio	CXR		14.08	-0.07	Regent	RGCI		5.49	unch
Cumulus	CMLS		13.60	+0.02	Saga Commun.	SGA		17.05	+0.16
Disney	DIS		24.91	+0.06	Salem Comm.	SALM		24.57	+0.08
Emmis	EMMS		17.95	-0.20	Sirius Sat. Radio	SIRI		3.70	+0.05
Entercom	ETM		31.72	+0.05	Spanish Bcg.	SBSA		10.32	-0.01
Entravision	EVC		7.50	+0.07	Univision	UVN		30.23	-0.46
Fisher	FSCI		47.00	-0.25	Viacom, Cl. A	VIA		34.61	+0.39
Gaylord	GET		31.20	+0.10	Viacom, Cl. B	VIAb		34.05	+0.33
Hearst-Argyle	HTV		24.93	+0.16	Westwood One	WON		20.62	-0.09
Interep	IREP		0.75	-0.07	XM Sat. Radio	XMSR		28.99	-0.43
International Bcg.	IBCS		0.02	unch	-	-	-	-	-

Bounceback

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

This reader says we are wrong about the documentary dust-up at Sinclair.
| More... |

More News Headlines

Dick Carlson passes

Lee Rothman dead at 77

White House insider turned broadcaster Pierre Salinger dies

Interep's auditor resigns

Competing Media

Paxson fires back at NBC Universal
The uneasy partnership between Paxson Communications and NBC Universal has led to yet another court filing by Paxson. Of course, the company was required to respond to the lawsuit brought by NBC Universal seeking to up the dividend rate that Paxson has to pay on the convertible preferred stock that NBC Universal holds (8/24/04 TVBR Daily Epaper #165), but Paxson is also trying to piggyback another issue onto the case. It wants the Delaware Cancery Court to also rule on whether Paxson is required to redeem NBC Universal's stock by November 13th of this year, as NBC Universal claims. Paxson claims that the terms of the stock agreement don't require it to make the redemption if it doesn't have the cash on hand to do so or is prohibited from doing so by its senior lending agreements - - both of which are currently the case. As for the dividend rate, Paxson want the court to affirm the 16.2% rate that it established in September (9/20/04 TVBR Daily Epaper #183), which was up from the previous 8%, but well below the 30% or so that NBC Universal claims is called for. "We decided that it was in the best interests of our shareholders and the investment community to have the court confirm that under the plain and unambiguous terms of the Investment Agreement, we are not obligated to redeem the NBC preferred investment by November 13, 2004, and will not be in default under the Investment Agreement if we do not redeem NBC's investment," said Paxson Chairman and CEO Bud Paxson.

LPM data for the Boston, Chicago, Los Angeles and New York
TVB has begun tracking the LPM data that is now available for the Boston, Chicago, Los Angeles and New York markets. For the week ended Oct. 10, broadcast drew a higher aggregate primetime rating than ad-supported cable in all four markets in the three measured demos: HH, A18-49, and A25-54. In Los Angeles, broadcast drew nearly three times as many viewers as ad-supported cable. Nielsen Media Research has plans to bring continuous, overnight demographic ratings (known as Local People Meters or LPMs) into the top 10 television markets in the U.S. by 2006. LPMs are up and running in Boston, Chicago, Los Angeles and New York. Soon to follow will be San Francisco, Philadelphia, Washington (DC), Detroit, Dallas-Ft. Worth, and Atlanta. TVB posts the weekly LPM results for the four currently operational markets and will add more as Nielsen continues its roll-out.
| 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.

Pounding continues as Wall Street still lower radio stocks
S.G. Cowen analyst James Marsh sees radio stocks bump around near 52-week lows, we still see downside for the average radio stock from here, especially as we near 2006. It was the dire warning from in the latest missive to investors. And it is 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. Those who got rich, swell, and those who didn't our word GO Private and get of the headlock of Wall Street. You are killing your business not the analysts.
10/15/04 RBR #202

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. 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. 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.
10/15/04 RBR #202

The Breeze from Naples, FL
is blowing--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. As for post-election business, both November and December are pacing up in the low single digits. RBR observation: Gannett CEO Doug McCorkindale just two days ago 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 10/15/04 RBR #202

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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